A class action lawsuit was filed against Luna Innovations, Inc. (NASDAQ:LUNA) on April 1, 2024. The plaintiffs (shareholders) alleged that they bought LUNA stock at artificially inflated prices between August 11, 2023 and March 25, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought LUNA stock during that period can click here to learn about joining the lawsuit.
Luna Innovations is a technology company that develops and manufactures advanced fiber optic-based sensing, test and measurement, monitoring, and control solutions. The company’s products are used in the aerospace, telecommunications, automotive, energy, and industrial sectors. Luna Innovations has grown over the years through multiple acquisitions.
The plaintiffs maintain that Luna Innovations and three of its current and/or former senior officers deceived investors by repeatedly lying and withholding vital information about the company’s business practices such as revenue recognition and the adequacy of the company’s internal controls from SEC filings and related material.
The information became clear on March 12, after the markets closed, when the company said in a SEC filing that it has to restate its financial statements for Q2 and Q3 of Fiscal 2023. It also announced a delay in filing the annual report. The company noted that it was investigating “certain transactions for which revenue was recognized in the second and third quarters of 2023 that did not qualify for revenue recognition under U.S. generally accepted accounting principles.” Moreover, on March 25, the company announced the abrupt retirement of its CEO.
Interestingly, during the Class Period, the defendants reiterated the accuracy and effectiveness of the company’s financial reporting and disclosures.
As per the class action lawsuit, Luna Innovations caused its stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s financial prospects during the Class Period.
Notably, LUNA stock plunged 51% between March 12 and March 25, causing massive damage to shareholders’ returns.
