SolarEdge Technologies, Inc.

SolarEdge Technologies develops and sells solar energy solutions. Plaintiffs alleged that SolarEdge and its senior executives misled investors about the strength of demand for its products in Europe and inventory levels at SolarEdge’s customers. In addition, Plaintiffs further claimed that the company engaged in “channel stuffing” by forcing distributors to take delivery of unneeded products to meet revenue targets, which artificially inflated reported revenues while masking declining demand and rising inventory levels. As the truth emerged through partial disclosures, including admissions of excess inventory and slowing growth in Europe, SolarEdge’s stock price fell 27%, causing significant harm to investors.

Following multiple rounds of motions to dismiss, the Court allowed key claims related to demand and inventory misstatements to proceed. Plaintiffs and defendants then engaged in a lengthy negotiation process, and Pomerantz secured the $55 million settlement. The damages amount is approximately 5.7% to 9.6% of the maximum recoverable damages, above the median recovery in similarly sized securities class action settlements.

Notably, Pomerantz argued that the Court should infer the individual defendants’ knowledge of information that undercuts their statements. Judge Woods was amply persuaded; he inferred scienter based on the defendants’ regular meetings and access to reports, stating: “it is a more-than-reasonable inference that if a corporate executive looks at reports of inventory and looks at reports of the rate at which that inventory is sold, they could get a picture of the distributors’ demand.”

Pomerantz’s SolarEdge litigation is led by Partners Brian Calandra and Jeremy A. Lieberman.