October 14, 2020 - An investor in shares of Loop Industries, Inc. (NASDAQ: LOOP) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Loop Industries, Inc. in connection with certain allegedly false and misleading statements made between September 24, 2018 and October 12, 2020.

Canada based Loop Industries, Inc. focuses on depolymerizing waste polyethylene terephthalate (PET) plastics and polyester fibers into base building blocks.

On October 13, 2020, a report was published alleging, among other things, that “[a] former Loop employee told us that Loop’s scientists, under pressure from CEO Daniel Solomita, were tacitly encouraged to lie about the results of the company’s process internally. We have obtained internal documents and photographs to support their claims.” The report also stated that “Loop’s previous claims of breaking PET down to its base chemicals at a recovery rate of 100% were ‘technically and industrially impossible,’” according to a former employee. Moreover, the report alleged that “Executives from a division of key partner Thyssenkrupp, who Loop entered into a ‘global alliance agreement’ with in December 2018, told us their partnership is on ‘indefinite’ hold and that Loop ‘underestimated’ both costs and complexities of its process.”

Shares of Loop Industries, Inc. (NASDAQ: LOOP) declined from $13.90 per share on October 5, 2020, to as low as $6.77 per share on October 14, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of Loop Industries, Inc. (NASDAQ: LOOP) common shares between September 24, 2018 and October 12, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between September 24, 2018 and October 12, 2020, the Defendants failed to disclose to investors that Loop scientists were encouraged to misrepresent the results of Loop’s purportedly proprietary process, that Loop did not have the technology to break PET down to its base chemicals at a recovery rate of 100%, that, as a result, the Company was unlikely to realize the purported benefits of Loop’s announced partnerships with Indorama and Thyssenkrupp, and that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.