The Complaint alleges that during the Class Period the defendants issued materially false and misleading statements concerning the Company’s operations and financial prospects. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company had severe manufacturing deficiencies at its Livonia, Michigan manufacturing facility, which produced defective prismatic cells that resulted in premature failure of battery modules and packs; (2) as a result of the defective prismatic cells, A123 would likely be required – and incur substantial costs – to recall and replace the affected modules and packs, threatening the financial viability of the Company; and (3), as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times.
