FLR Class Action Report
Levi & Korsinsky, LLP
May 31, 2018
On May 25, 2018, investors sued Fluor Corporation (“Fluor” or the “Company”) in United States District Court, Northern District of Texas. Plaintiffs in the federal securities class action allege that they acquired Fluor stock at artificially inflated prices between August 4, 2013, and May 3,2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. Here’s everything you need to know about the Fluor class action lawsuit (FLR class action lawsuit):
Summary of the Allegations
Fluor (NYSE: FLR) bills itself “as one of the world’s largest engineering, procurement, fabrication, construction and maintenance (EPFCM) companies.” As such, it serves its customers through four divisions. These are, Energy, Chemicals & Mining; Industrial, Infrastructure & Power; Diversified Services; and Government.
Of relevance here is the Company’s provision of design, engineering, procurement, construction and project management services to “transportation, life science, advanced manufacturing, water and power sectors” through its Industrial, Infrastructure & Power segment. Also of relevance is Fluor’s provision of products and services to customers and clients in the gas market. These include “engineering, procurement, construction, program management, start-up and commissioning and technical services, notably related to the construction of gas-fired power generation facilities.”
Summary of Facts
Fluor and three of its current and former officers and/or directors now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about Fluor’s bidding process, estimation of gas-fired projects and associated issues from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Fluor’s stock to trade at artificially inflated prices during the time in question.
The truth began to emerge when Fluor issued a press release after the market closed on August 3, 2017. In it, the Company said that its results for the quarter included substantial “after tax” charges associated with “estimated cost increases on three gas-fired power projects.” The Company added: “The challenges we have experienced over the last two years on gas-fired power projects are inconsistent with the results we have historically achieved.”
On May 3, 2018, the Company also issued a press release after the market closed. In it, Fluor announced downward revisions to its 2018 guidance for EPS and assigned most of the blame to ”forecast revisions on a gas-fired power project.”
During an ensuing conference call, the Company said it had been involved in 12 gas-fired power projects since 2003, and that 10 of those have “underperformed our as-sold expectation with three suffering losses.” It also announced that it would “discontinue the pursuit of lump-sum gas-fired power market from the end of Q1.”
A closer look…
As alleged in the May 25 complaint, the Company repeatedly made misleading public statements during the Class Period.
For example, on a form filed with the SEC on February 18, 2015, the Company said in pertinent part: “The overall revenue decline was partially offset by a significant increase in project execution activities for a gas-fired power plant in Virginia.”
On another form filed with the SEC on February 18, 2016, the Company said in pertinent part: “The overall revenue decline was partially offset by increased project execution activities for several projects in the early states of project execution, including a gas-fired power plant in Greensville County, Virginia and two large gas-fired power plants in South Carolina and Florida.”
Finally, on yet another form filed with the SEC on February 17, 2017, the Company stated: “Revenue in 2016 increased 81 percent compared to 2015, primarily due to increased project execution activities in the power business line for several projects, including two nuclear projects and several gas-fired power plants in the southeastern United States.”
Impact of the Alleged Fraud on Fluor’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is July 24, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Fluor common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
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Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.
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