The bosses of one of the world’s leading electrolyser and fuel-cell makers, Plug Power, have been accused of insider trading and making false and misleading statements in a class action lawsuit being brought in the US.

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San Francisco-based legal firm Schubert Jonckheer & Kolbe alleges that CEO Andy Marsh and chief financial officer (CFO) Paul Middleton “made false and misleading statements to investors concerning the profitability of the company’s hydrogen fuel cell business”.

In a statement on its website, the legal firm writes: “Specifically, among other things, the company and its officers are alleged to have carried out a long-running scheme to misclassify the cost of liquid hydrogen delivered to customers, thus inflating the perceived profitability of Plug Power’s core business.

“On May 14, 2021, the company restated several prior-period financial statements from 2018 through the third quarter of 2020 to address the misclassification. At the same time, Plug Power also disclosed a material weakness in internal controls and announced that the company’s improper accounting practices, allegedly uncovered by a new auditor, dated back to 2016.

“Shortly before the restatements, Mr. Marsh and Mr. Middleton sold approximately $45 million of their personal holdings of Plug Power stock alongside several other high-level insiders, including at least six directors and the company’s General Counsel and COO [chief operating officer].

“The company also conducted two lucrative secondary offerings in November 2020 and February 2021, together netting approximately $3 billion of additional capital on the basis of these allegedly false and misleading statements.”

The Schubert firm says it is “investigating potential derivative claims on behalf of shareholders of Plug Power Inc relating to possible false and misleading statements to investors and significant insider trading by several officers and directors” and that Plug, Marsh and Middleton “are currently subject to a consolidated class action securities lawsuit in the US District Court for the Southern District of New York”.

Plug Power is headquartered in Latham, New York state.

Market shrugs

The lawsuit seems to have been met by a collective shrug from the market, with the company share price on the Nasdaq exchange still way higher than the $13-20 seen throughout the summer — at $29.59 when this article was published — only slightly down on the $29.92 seen at the end of Friday, when the statement quietly appeared on the Schubert firm website.

“In any company that relies heavily on sudden accelerations in business or falls in prices in order to achieve their future goals, there will be miscalculations. These are not to be confused with deliberate falsehoods,” Peter White, CEO and principal analyst at UK-based analyst Rethink Energy tells Recharge.

“The impact that Plug Power has had on the acceleration of the hydrogen business model is without peer, and we believe that it is likely, going on past class actions we have seen through, that both the company and its potential will remain untouched by this in the long term.

“That does not mean that some findings will not go against the company or that payments won’t be made to the SEC [the US government’s Securities and Exchange Commission] and others for any incorrect statements made, but we feel that the potential of the markets it is in are so large and so long term that there will be little, if any, long term impacts on its business and its standing.”

Recharge has approached Plug Power and Schubert Jonckheer & Kolbe for comment.

Plug currently has a 1GW electrolyser and fuel-cell factory in Rochester, New York, is building a 2GW electrolyser plant in Queensland, Australia, in a joint venture with Fortescue Future Industries, and is also building a 1GW electrolyser factory in South Korea in a joint venture with SK Group.

On top of this, it is also fast becoming a major green hydrogen developer, having recently signed a deal to supply online giant Amazon with more than 10,000 tonnes of renewable H2 annually from 2025, while in June it announced plans to build a 100MW green hydrogen production facility at the Belgian port of Antwerp-Bruges.

To read Recharge’s recent exclusive interview with Plug CEO Andy Marsh — who has held his position since 2008 — click here.