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Evan R. Hoey

Associate

D   484.270.1438
F   610.667.7056

Evan Hoey, an associate of the Firm, focuses his practice in securities litigation.

Experience

Current Cases

  •   CASE CAPTION Sjunde AP-Fonden, et al., v. General Electric Company, et al.
      COURT United States District Court for the Southern District of New York
      CASE NUMBER 1:17-cv-08457-JMF
      JUDGE Honorable Jesse M. Furman
      PLAINTIFF  Sjunde AP-Fonden and The Cleveland Bakers and Teamsters Pension Fund
      DEFENDANTS General Electric Company and Jeffrey S. Bornstein
      CLASS PERIOD March 2, 2015 through January 23, 2018, inclusive

    This securities fraud class action case arises out of alleged misrepresentations made by General Electric (“GE”) and its former Chief Financial Officer, Jeffrey S. Bornstein (together, “Defendants”), regarding the use of factoring to conceal cash flow problems that existed within GE Power between March 2, 2015, and January 24, 2018 (the “Class Period”).

    GE Power is the largest business in GE’s Industrials operating segment. The segment constructs and sells power plants, generators, and turbines, and also services such assets through long term service agreements (“LTSAs”). In the years leading up to the Class Period, as global demand for traditional power waned, so too did GE’s sales of gas turbines and its customer’s utilization of existing GE-serviced equipment.  These declines drove down GE Power’s earnings under its LTSAs associated with that equipment.  This was because GE could only collect cash from customers when certain utilization levels were achieved or upon some occurrence within the LTSA, such as significant service work.

    Plaintiffs allege that in an attempt to make up for these lost earnings, GE modified existing LTSAs to increase its profit margin and then utilized an accounting technique known as a “cumulative catch-up adjustment” to book immediate profits based on that higher margin.  In most instances, GE recorded those cumulative catch-up earnings on its income statement long before it could actually invoice customers and collect cash under those agreements. This contributed to a growing gap between GE’s recorded non-cash revenues (or “Contract Assets”) and its industrial cash flows from operating activities (“Industrial CFOA”).  

    In order to conceal this increasing disparity, Plaintiffs allege that GE increased its reliance on long-term receivables factoring (i.e., selling future receivables to GE Capital, GE’s financing arm, or third parties for immediate cash).  Through long-term factoring, GE pulled forward future cash flows, which it then reported as cash from operating activities (“CFOA”).  GE relied on long-term factoring to generate CFOA needed to reach publicly disclosed cash flow targets.  Thus, in stark contrast to the true state of affairs within GE Power—and in violation of Item 303 of Regulation S-K—GE’s Class Period financial statements did not disclose material facts regarding GE’s factoring practices, the true extent of the cash flow problems that GE was attempting to conceal through receivables factoring, or the risks associated with GE’s reliance on factoring. 

    Eventually, however, GE could no longer rely on this unsustainable practice to conceal its weak Industrial cash flows.  As the truth was gradually revealed to investors—in the form of, among other things, disclosures of poor Industrial cash flows and massive reductions in Industrial CFOA guidance—GE’s stock price plummeted, causing substantial harm to Plaintiffs and the Class.

    In January 2021, the Court sustained Plaintiffs’ claims based on allegations that GE failed to disclose material facts relating its practice of and reliance on factoring, in violation of Item 303, and affirmatively misled investors about the purpose of GE’s factoring practices. In April 2022, following the completion of fact discovery, the Court granted Plaintiffs’ motion for class certification, certifying a Class of investors who purchased or otherwise acquired GE common stock between February 29, 2016 and January 23, 2018.  In that same order, the Court granted Plaintiffs’ motion for leave to amend their complaint to pursue claims based on an additional false statement made by Defendant Bornstein.  The Court had previously dismissed these claims but, upon reviewing Plaintiffs’ motion—based on evidence obtained through discovery—permitted the claim to proceed.

    Expert discovery is complete, and the parties are currently engaged in summary judgment motion practice.

    Read Fifth Amended Consolidated Class Action Complaint Here

    Read Opinion and Order Granting and Denying in Part Motion to Dismiss Here

    Read Order Granting Motion for Class Certification and for Leave to Amend Here

    Click Here to Read the Class Notice

  • CASE CAPTION John Harvey Schneider, et al. v. Natera, Inc., et al.
    COURT United States District Court for the Western District of Texas
    CASE NUMBER 1:22-cv-00398-LY
    JUDGE Honorable Lee Yeakel
    PLAINTIFF

    British Airways Pension Trustees Limited (“BAPTL”) and Key West Police & Fire Pension Fund (“Key West P&F”)

    DEFENDANTS Natera, Inc., Steve Chapman, Michael Brophy, Matthew Rabinowitz, Paul R. Billings, Roy Baynes, Monica Bertagnolli, Roelof F. Botha, Rowan Chapman, Todd Cozzens, James I. Healy, Gail Marcus, Herm Rosenman, Jonathan Sheena, Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Cowen and Company, LLC, SVB Leerink LLC, Robert W. Baird & Co. Inc., BTIG, LLC, and Craig-Hallum Capital Group LLC
    CLASS PERIOD February 26, 2020 to March 14, 2022, inclusive

    This securities fraud class action arises out of Natera’s representations and omissions about the purported “superiority” of its kidney transplant rejection test, Prospera, compared to a competitor’s product, AlloSure, and the revenues and demand associated with the Company’s flagship non-invasive prenatal screening test, Panorama.  During the Class Period, Defendants touted Prospera’s superiority over AlloSure based on what they represented as a head-to-head comparison of underlying study data.  However, internal Natera emails revealed that Natera recognized that the comparisons were unsupported and misleading.  Further, Defendants consistently highlighted the impressive revenue performance and seemingly organic demand for Panorama.  However, the market was unaware that Natera employed several deceptive billing and sales practices that inflated these metrics.  Meanwhile, Defendants, CEO Steve Chapman, CFO Matthew Brophy, and co-founder and Executive Chairman of the Board, Matthew Rabinowitz, sold more than $137 million worth of Natera common stock during the Class Period.  Natera also cashed in, conducting two secondary public offerings, selling investors over $800 million of Natera common stock during the Class Period.

    The truth regarding Prospera’s false claims of superiority and the Company’s deceptive billing and sales practices was disclosed to the public through disclosures on March 9, 2022, and March 14, 2022.  Natera’s stock price fell significantly in response to each corrective disclosure, causing massive losses for investors.

    On October 7, 2022, Plaintiffs filed an 89-page amended complaint on behalf of a putative class of investors alleging that Natera, Chapman, Brophy, Rabinowitz, and former Chief Medical Officer and Senior Vice President of Medical Affairs, Paul R. Billings, violated Sections 10(b) and 20(a) of the Securities Exchange Act.  Plaintiffs also allege that Defendants Chapman, Brophy, and Rabinowitz violated Section 20A of the Exchange Act by selling personally held shares of Natera common stock, while aware of material nonpublic information concerning Prospera and Panorama.  In addition, Plaintiffs claim that Defendants Chapman, Brophy, Rabinowitz, several Natera directors, and the underwriters associated with Natera’s July 2021 secondary public offering violated Sections 11, 12(a)(2), and 15 of the Securities Act.

    Defendants’ deadline to file a motion to dismiss or answer is December 6, 2022.
     

  • CASE CAPTION                                    Carmignac Gestion, S.A. v. Perrigo Co. plc, et al.; First Manhattan Co. v. Perrigo Co. plc, et al.; Nationwide Mutual Funds, on behalf of its series Nationwide Geneva Mid Cap Growth and Nationwide S&P 500 Index Fund, et al. v. Perrigo Co. plc, et al.; Aberdeen Canada Funds – Global Equity Fund, a series of Aberdeen Canada Funds, et al. v. Perrigo Co. plc, et al.; Schwab Capital Trust on behalf of its series Schwab S&P 500 Index Fund, Schwab Total Stock Market Index Fund, Schwab Fundamental U.S. Large Company Index Fund, and Schwab Health Care Fund, et al. v. Perrigo Co. plc, et al.; Principal Funds, Inc., et al. v. Perrigo Co. plc, et al.; and Kuwait Investment Authority, et al. v. Perrigo Co. plc, et al.
    COURT United States District Court for the District of New Jersey
    CASE NUMBER No. 2:17-cv-10467-MCA-LDW; No. 2:18-cv-02291-MCA-LDW; No. 2:18-cv-15382-MCA-LDW; No. 2:19-cv-06560-MCA-LDW; No. 2:19-cv-03973-MCA-LDW; No. 2:20-cv-02410-MCA-LDW; No. 2:20-cv-03431-MCA-LDW
    JUDGE Honorable Madeline Cox Arleo and Honorable Leda Dunn Wettre
    PLAINTIFF

    Carmignac Gestion, S.A., First Manhattan Co., Schwab Capital Trust, et al., Principal Funds, Inc., Kuwait Investment Authority, et al., Nationwide Mutual Funds, et al., and Aberdeen Canada Funds – Global Equity Fund, et al.

    DEFENDANTS Perrigo Company plc (“Perrigo”), Joseph C. Papa, and Judy L. Brown
    CLASS PERIOD April 21, 2015 through May 3, 2017, inclusive

    These seven shareholder opt-out actions stem from drug maker Perrigo’s efforts to mislead investors to stave off a hostile takeover bid by pharmaceutical rival Mylan in 2015.  The plaintiff investment funds allege that Perrigo and its senior officers misrepresented the true state of the company’s $4.5 billion acquisition of Omega Pharma, an over-the-counter healthcare company based in Belgium, and fraudulently touted its ability to withstand pricing pressure from the influx of competing drugs in the generic drug markets.

    In 2018, we filed the first of these actions in the United States District Court for the District of New Jersey on behalf of institutional investors in the United States, the United Kingdom, France, and Kuwait.  The Honorable Madeline Cox Arleo denied Defendants’ motions to dismiss the actions in 2019.  The parties concluded discovery in November 2021 and are awaiting summary judgment motion practice.

    Read Charles Schwab v. Perrigo Amended Complaint Here

    Read First Manhattan v. Perrigo Amended Complaint Here

    Read First Manhattan v. Perrigo Motion to Dismiss Opinion Here 

    Read Kuwait v. Perrigo Complaint Here 

    Read Nationwide v. Perrigo Complaint Here

    Read Nationwide v. Perrigo Motion to Dismiss Opinion Here

    Read Principal v. Perrigo Complaint Here 

    Read Aberdeen v. Perrigo Complaint Here

    Read Carmignac Gestion v. Perrigo Complaint Here

    Read Carmignac Gestion v. Perrigo Motion to Dismiss Opinion Here

  • CASE CAPTION  Charles Larry Crews, Jr., et al. v. Rivian Automotive Inc., et al.
    COURT United States District Court for the Central District of California Western Division
    CASE NUMBER 2:22-cv-0524
    JUDGE Honorable R. Gary Klausner
    PLAINTIFF Sjunde AP-Fonden, James Stephen Muhl
    DEFENDANTS Rivian Automotive, Inc. (“Rivian” or the “Company”), Robert J. Scaringe, Claire McDonough, Jeffrey R. Baker, Karen Boone, Sanford Schwartz, Rose Marcario, Peter Krawiec, Jay Flatley, Pamela Thomas-Graham, Morgan Stanley & Co. LLC, Goldman Sachs & Co., LLC, J.P. Morgan Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Allen & Company LLC, BofA Securities, Inc., Mizuho Securities USA LLC, Wells Fargo Securities, LLC, Nomura Securities International, Inc., Piper Sandler & Co., RBC Capital Markets, LLC, Robert W. Baird & Co. Inc., Wedbush Securities Inc., Academy Securities, Inc., Blaylock Van, LLC, Cabrera Capital Markets LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Samuel A. Ramirez & Co., Inc., Siebert Williams Shank & Co., LLC, and Tigress Financial Partners LLC.
    CLASS PERIOD November 10, 2021 through March 10, 2022, inclusive

    This securities fraud class action case arises out of Defendants’ representations and omissions made in connection with Rivian’s highly-anticipated initial public offering (“IPO”) on November 10, 2021. Specifically, the Company’s IPO offering documents failed to disclose material facts and risks to investors arising from the true cost of manufacturing the Company’s electric vehicles, the R1T and R1S, and the planned price increase that was necessary to ensure the Company’s long-term profitability. During the Class Period, Plaintiffs allege that certain defendants continued to mislead the market concerning the need for and timing of a price increase for the R1 vehicles. The truth concerning the state of affairs within the Company was gradually revealed to the public, first on March 1, 2022 through a significant price increase—and subsequent retraction on March 3, 2022—for existing and future preorders. And then on March 10, 2022, the full extent Rivian’s long-term financial prospects was disclosed in connection with its Fiscal Year 2022 guidance. As alleged, following these revelations, Rivian’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.

    On July 22, 2022, Plaintiffs filed a Consolidated Class Action Complaint on behalf of a putative class of investors alleging that Rivian, and its CEO Robert J. Scaringe (“Scaringe”), CFO Claire McDonough (“McDonough”), and CAO Jeffrey R. Baker (“Baker”) violated Sections 10(b) and 20(a) of the Securities Exchange Act. Plaintiffs also allege violations of Section 11, Section 12(a)(2), and Section 15 of the Securities Act against Rivian, Scaringe, McDonough, Baker, Rivian Director Karen Boone, Rivian Director Sanford Schwartz, Rivian Director Rose Marcario, Rivian Director Peter Krawiec, Rivian Director Jay Flatley, Rivian Director Pamela Thomas-Graham, and the Rivian IPO Underwriters. On August 29, 2022, Defendants filed motions to dismiss. The parties are currently engaged in briefing on those motions.

    Read Consolidated Class Action Complaint Here