In Re LDK Solar Securities Litigation

ORDER DENYING DEFENDANTS’ MOTION TO DISMISS

INTRODUCTION

In this federal securities action, a consolidated class of securities purchasers is suing defendant companies LDK Solar Co., Ltd., Jiangxi LDK Solar, and LDK Solar USA, Inc., and individual defendants Xiaofeng Peng, Jack Lai, Xingxue Tong, Qiqiang Yao, Liangbao Zhu, Yonggang Shao, and Gang Wang for materially overstating the quantity and value of their inventory. Once the market realized the alleged discrepancies, the value of LDK securities dropped. Defendants now move to dismiss this action for failure to state a claim upon which relief can be granted under the heightened pleading standards of the Private Securities Litigation Reform Act. For the reasons stated below, the motion is Denied.

STATEMENT

Plaintiffs are a putative class of persons who purchased LDK securities from June 1, 2007, through October 7, 2007. Investor Shahpour Javidzad was appointed lead plaintiff. In brief, plaintiffs contend that defendants doctored LDK’s financial statements and inventory and made public statements to make the company appear more profitable than it actually was, thereby inducing more investments. When the market became aware of…