The plaintiff in a securities lawsuit against an algae company is attempting to get the proposed class certified to include others who purchased TerraVia stock in the time period he alleges they were misleading the public and violating federal laws. The company allegedly made statements on their website in order to present a picture that did not represent internally known facts.
“TerraVia touted its algae-based food additives to the market, even after one of its food-manufacturer partners told TerraVia that its ingredients were causing gastrointestinal (GI) distress in consumers, and after the company acknowledged the GI issue in a letter to the complaining manufacturer,” the motion for class certification stated.
Ruben Perales, the plaintiff represented by Pomerantz, claims to adequately represent the rest of the class. TerraVia Holdings, Inc., its founder Jonathan Wolfson, CEO Apu Mody, and CFO Tyler Painter are represented by Morrison & Forester. TerraVia creates nutrition and specialty ingredients from algae. The ingredients are used in animal nutrition, personal care, and consumer foods.
The lawsuit began in November of 2016 when Perales filed a complaint alleging he was given false and misleading statements about the company, including statements that violated federal securities laws. Some of the phrases the petition pointed out were “outstanding consistency,” “an array of benefits,” and “help make delicious foods that are better for people and inspire solutions for a better planet.”
Perales claimed the defendants failed to disclose their products cause nausea and vomiting, and because they were aware of this, their positive statements about the business were misleading. After a news article was published in Bloomberg stating that algae in foods was making people sick, TerraVia’s stock fell $0.15 per share, or over 8 percent. The company later declared bankruptcy.
The plaintiff argues that although the individual loss is relatively small, the expense of litigation makes it hard for each class member to address wrongs. A hearing on class certification will be held on August 20 before Judge James Donato. The class includes any who purchased or acquired TerraVia Holdings securities between May 4, 2016, and November 6, 2016.