Case 3:16-cv-06633-JD Document 1 Filed 11/16/16 Page 1 of 14
Laurence M. Rosen, Esq. (SBN 219683)
THE ROSEN LAW FIRM, P.A.
2 355 South Grand Avenue, Suite 2450
Los Angeles, CA 90071
3 Telephone: (213) 785-2610
Facsimile: (213) 226-4684
4
Email: [email protected]
5
Counsel for Plaintiff
6
UNITED STATES DISTRICT COURT
7
NORTHERN DISTRICT OF CALIFORNIA
8
RUBEN PERALES, Individually and on behalf
9 of all others similarly situated,
CLASS ACTION COMPLAINT FOR
VIOLATIONS OF THE FEDERAL
10
Plaintiff,
SECURITIES LAWS
11
v.
JURY TRIAL DEMANDED
12
1
13
14
15
TERRAVIA HOLDINGS, INC., JONATHAN
S. WOLFSON, APU MODY, and TYLER W.
PAINTER,
Defendants.
16
17
18
Plaintiff Ruben Perales (“Plaintiff”), individually and on behalf of all other persons
19 similarly situated, by Plaintiff undersigned attorneys, for Plaintiff’s complaint against
20 Defendants (defined below), alleges the following based upon personal knowledge as to Plaintiff
21 and Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia,
22 the investigation conducted by and through Plaintiff’s attorneys, which included, among other
23 things, a review of the Defendants’ public documents, announcements, United States Securities
24 and Exchange Commission (“SEC”) filings, wire and press releases published by and regarding
25 TerraVia Holdings, Inc. (“TerraVia” or the “Company”), analysts’ reports and advisories about
26 the Company, and information readily obtainable on the Internet. Plaintiff believes that
27
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-1CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL
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Case 3:16-cv-06633-JD Document 1 Filed 11/16/16 Page 2 of 14
1 substantial evidentiary support will exist for the allegations set forth herein after a reasonable
2 opportunity for discovery.
3
4
NATURE OF THE ACTION
1.
This is a federal securities class action on behalf of a class consisting of all
5 persons other than Defendants who purchased or otherwise acquired TerraVia securities between
6 August 8, 2016 and November 7, 2016, both dates inclusive (the “Class Period”), seeking to
7 recover compensable damages caused by Defendants’ violations of the federal securities laws
8 and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
9 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
10
11
JURISDICTION AND VENUE
2.
The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of
12 the Exchange Act (15 U.S.C. §§78j(b), 78b-1 and 78t(a)) and Rule 10b-5 promulgated
13 thereunder by the SEC (17 C.F.R. §240.10b-5).
14
3.
This Court has jurisdiction over the subject matter of this action pursuant to 28
15 U.S.C. §1331 and Section 27 of the Exchange Act (15 U.S.C. §78aa).
16
4.
Venue is proper in this District pursuant to Section 27 of the Exchange Act (15
17 U.S.C. §78aa), and 28 U.S.C. §1391(b) as the Company maintains its headquarters and
18 conducts business in this District.
19
5.
In connection with the acts, conduct, and other wrongs alleged in this Complaint,
20 Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,
21 including but not limited to, the United States mails, interstate telephone communications and
22 the facilities of the national securities exchange.
23
24
PARTIES
6.
Plaintiff Ruben Perales, as set forth in the accompanying certification,
25 incorporated by reference herein, purchased TerraVia securities at artificially inflated prices
26 during the Class Period and has been damaged thereby.
27
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Case 3:16-cv-06633-JD Document 1 Filed 11/16/16 Page 3 of 14
1
7.
Defendant TerraVia is a company that creates and sells food, nutrition, and
2 specialty ingredients from algae. Its platform uses microalgae to produce high-value triglyceride
3 oils, proteins, fibers, micronutrients, and other ingredients. The Company offers products, such
4 as specialty food and nutrition ingredients, animal nutrition ingredients, and specialty personal
5 care ingredients, as well as consumer-focused food products. The company was formerly known
6 as Solazyme, Inc. and changed its name to TerraVia Holdings, Inc. in May 2016. TerraVia was
7 incorporated in Delaware in 2003 and is headquartered at 225 Gateway Boulevard, South San
8 Francisco, CA 94080. The Company’s common stock is listed on the NASDAQ Global Select
9 Market (“NASDAQ”) under the ticker symbol “TVIA.”.
10
8.
Defendant Jonathan S. Wolfson (“Wolfson”) is a co-founder and the Chairman of
11 the board of directors during the entire Class Period. Wolfson was TerraVia’s Chief Executive
12 Officer (“CEO”) from 2008 to on or about August 21, 2016.
13
9.
Defendant Apu Mody (“Mody”) is the CEO of TerraVia since on or about August
14 22, 2016 through the end of the Class Period.
15
10.
Defendant Tyler W. Painter (“Painter”) is the Chief Financial Officer (“CFO”)
16 since 2007 and Chief Operating Officer (“COO”) of TerraVia since 2014.
17
11.
Defendants Wolfson, Mody and Painter are sometimes collectively referred to
18 herein as “Individual Defendants.”
19
12.
Each of the Individual Defendants:
20
(a)
directly participated in the management of the Company;
21
(b)
was directly involved in the day-to-day operations of the Company at the
highest levels;
22
23
(c)
24
25
26
was privy to confidential proprietary information concerning the Company
and its business and operations;
(d)
was involved in drafting, producing, reviewing and/or disseminating the
false and misleading statements and information alleged herein;
27
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1
(e)
2
was aware of or recklessly disregarded the fact that the false and
misleading statements were being issued concerning the Company; and
3
(f)
4
approved or ratified these statements in violation of the federal securities
laws.
5
13.
TerraVia is liable for the acts of the Individual Defendants and their employees
6 under the doctrine of respondeat superior and common law principles of agency because all of
7 the wrongful acts complained of herein were carried out within the scope of their employment.
8
14.
The scienter of the Individual Defendants and other employees and agents of
9 TerraVia are similarly imputed to TerraVia under respondeat superior and agency principles.
10
15.
Defendants TerraVia, Wolfson, Mody, and Painter are referred to herein as
11 “Defendants.”
12
SUBSTANTIVE ALLEGATIONS
13
Materially False and Misleading Statements
14
16.
The Company provides the following descriptions of its products on its official
15 website:
•
16
Our microalgae-based protein platform leverages fermentation technology to
17
produce highly nutritious, naturally derived, minimally processed ingredients with
18
outstanding consistency. 1
•
19
AlgaVia® Whole Algae Ingredients provide an array of benefits that can make
20
reduced-fat foods taste richer, vegan protein fortification simpler and the
21
reduction of saturated fat with great taste and texture possible. Experience a food
22
revolution that makes the future bolder and brighter. 2
•
23
AlgaVia® Whole Algae Ingredients help make delicious foods that are better for
people and inspire solutions for a better planet. 3
24
25
26
1
http://algavia.com/wp-content/uploads/2014/11/ProteinRich.pdf
http://algavia.com/
3
http://algavia.com/
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2
Case 3:16-cv-06633-JD Document 1 Filed 11/16/16 Page 5 of 14
•
1
[Lipid Rich Whole Algae] Deliver healthier, indulgent products without
compromise. 4
2
•
3
AlgaVia® Protein-Rich Whole Algae is vegan, free of known allergens and
gluten-free—with additional fiber, lipids, carbohydrates and micronutrients. 5
4
•
5
AlgaVia® Protein-Rich Whole Algae delivers a unique set of functional and
6
nutritional benefits.
7
o
Whole food ingredient
8
o
Free of known allergens
9
o
Sustainable, naturally-derived
10
o
Contains all essential amino acids
11
o
Adds dietary fiber, healthy lipids¹ and micronutrients to food products
12
o
Gluten-free, non-GMO and vegan
13
o
Manufactured in the U.S.
14
o
FDA GRAS No Questions Letter received
15
o
High protein digestibility
16
o
Zero to minimal impact on the texture or viscosity of a finished product
17
o
Stable in a variety of temperatures and pH conditions 6
18
(Emphasis added).
19
17.
On August 8, 2016, the Company filed a quarterly report on Form 10-Q with the
20 SEC announcing the Company’s financial and operating results for the quarter ended June 30,
21 2016 (the “2Q 2016 10-Q”). The 2Q 2016 10-Q was signed by Defendant Painter. The 2Q 2016
22 10-Q contained signed certifications pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) by
23 Defendants Wolfson and Patiner attesting to the accuracy of financial reporting, the disclosure of
24 any material changes to the Company’s internal controls over financial reporting, and the
25 disclosure of all fraud. The 2Q 2016 10-Q stated in relevant part:
26
27
28
4
http://algavia.com/ingredients/
http://algavia.com/ingredients/
6
http://algavia.com/ingredients/proteins/
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Our food oils are formulated to offer a variety of functional benefits such as
enhanced structuring capabilities and stability while providing robust formulation
and process flexibility. These food oils have the potential to improve upon
conventionally utilized specialty fats and oils and our high oleic algae oil has
received an FDA generally recognized as safe (GRAS) "No Questions" letter.
Currently, these oils are commercially available in our AlgaWise® branded food
oil platform and in our consumer culinary oil Thrive® brand. In addition, we have
developed novel methods of preparing powdered forms of triglyceride oils and
vegan proteins, and our powdered ingredients are composed of unmodified whole
algae cells. AlgaVia® Lipid Powder (commonly known as whole algae flour) and
AlgaVia® Protein (commonly known as whole algae protein) are whole algae
ingredients that can improve the nutritional profile of foods and beverages.
AlgaVia®Lipid Powder is a new fat source that allows for the reduction or
replacement of dairy fats, oils, and eggs. AlgaVia® Protein is a new vegan source
of protein that is free of known allergens and gluten. Both AlgaVia®Lipid Powder
and Protein can be used across a range of applications such as beverages (readyto-drink and powdered), bakery, snacks, bars, dressings, sauces and frozen
desserts and have received FDA GRAS “No Questions” letters. In May 2016, we
and Bunge announced that we launched a native, whole algae DHA,
docosahexaenoic acid, a long chain omega-3 fatty acid as a sustainable specialty
feed ingredient, prioritizing the aquaculture market.
18.
On November 4, 2016, the Company filed a quarterly report on Form 10-Q with
the SEC announcing the Company’s financial and operating results for the quarter ended
September 30, 2016 (the “3Q 2016 10-Q”). The 3Q 2016 10-Q was signed by Defendant Painter.
The 3Q 2016 10-Q contained signed SOX certifications by Defendants Mody and Patiner
attesting to the accuracy of financial reporting, the disclosure of any material changes to the
Company’s internal controls over financial reporting, and the disclosure of all fraud. The 3Q
2016 10-Q stated in relevant part:
21
22
23
24
25
26
27
Our food oils are formulated to offer a variety of functional benefits such as
enhanced structuring capabilities and stability while providing robust formulation
and process flexibility. These food oils have the potential to improve upon
conventionally utilized specialty fats and oils and our high oleic algae oil has
received an FDA generally recognized as safe (GRAS) "No Questions" letter.
Currently, these oils are commercially available in our AlgaWise®branded food oil
platform and in our consumer culinary oil Thrive® brand. In addition, we have
developed novel methods of preparing powdered forms of triglyceride oils and
vegan proteins, and our powdered ingredients are composed of unmodified whole
algae cells. AlgaVia® Lipid Powder (commonly known as whole algae flour) and
28
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1
2
3
4
5
6
7
8
9
10
11
12
AlgaVia® Protein (commonly known as whole algae protein) are whole algae
ingredients that can improve the nutritional profile of foods and beverages.
AlgaVia® Lipid Powder is a new fat source that allows for the reduction or
replacement of dairy fats, oils, and eggs. AlgaVia® Protein is a new vegan source
of protein that is free of known allergens and gluten. Both AlgaVia® Lipid Powder
and Protein can be used across a range of applications such as beverages (ready-todrink and powdered), bakery, snacks, bars, dressings, sauces and frozen desserts
and each ingredient received a FDA GRAS “No Questions” letter. In May 2016,
we and Bunge announced that we launched a native, whole algae DHA,
docosahexaenoic acid, a long chain omega-3 fatty acid as a sustainable specialty
feed ingredient, prioritizing the aquaculture market.
19.
The statements contained in ¶¶ 16-18 were materially false and/or misleading
when made because Defendants failed to disclose or indicate that: (1) TerraVia’s products
caused gastrointestinal distress, such as nausea and vomiting; and (2) as a result, Defendants’
statements about TerraVia’s business, operations, and prospects were false and misleading
and/or lacked a reasonable basis at all relevant times.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
The Truth Emerges
20.
On November 7, 2016, Bloomberg published an article entitled “Soylent Thinks It
Found What Was Making People Sick: Algae”, stating that Rosa Foods, Inc.’s flagship meal
replacement drink, Soylent, contains an algal flour ingredient provided by TerraVia that causes
consumers to become sick, namely nausea vomiting, and that Rosa Foods will be removing the
ingredient altogether from its product formulations by early 2017. Despite TerraVia Senior Vice
President
Mark
Brooks’
adamant
denial
that
TerraVia’s
algal
flour
was
responsible, Bloomberg further reported that TerraVia sent a letter in July to a distributor of
Honey Stinger, a Colorado energy bar company owned by EN-R-G Foods, LLC, “warning that
it had received a ‘modest number of reports’ showing that algal protein can cause
‘gastrointestinal distress,’ according to a copy seen by Bloomberg”—similar ailments to
those reported by Soylent customers. (Emphasis added)
21.
On this news, shares of TerraVia’s fell $0.15 per share or over 8% to close at
$1.70 per share on November 7, 2016, damaging investors.
27
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1
22.
As a result of Defendants’ wrongful acts and omissions, and the precipitous
2 decline in the market value of the Company's securities, Plaintiff and other Class members have
3 suffered significant losses and damages.
4
5
CLASS ACTION ALLEGATIONS
23.
Plaintiff brings this action as a class action pursuant to Federal Rules of Civil
6 Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or
7 otherwise acquired TerraVia securities traded on NASDAQ during the Class Period; and were
8 damaged upon the revelation of the alleged corrective disclosures. Excluded from the Class are
9 Defendants herein, the officers and directors of the Company at all relevant times, members of
10 their immediate families and their legal representatives, heirs, successors or assigns and any
11 entity in which Defendants have or had a controlling interest.
12
24.
The members of the Class are so numerous that joinder of all members is
13 impracticable. Throughout the Class Period, the Company’s securities were actively traded on
14 the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time,
15 and can only be ascertained through appropriate discovery, Plaintiff believes that there are at
16 least hundreds of members in the proposed Class. Members of the Class may be identified from
17 records maintained by TerraVia or its transfer agent, and may be notified of the pendency of this
18 action by mail using a form of notice customarily used in securities class actions.
19
25.
Plaintiff’s claims are typical of the claims of the members of the Class as all
20 members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
21 federal law that is complained of herein.
22
26.
Plaintiff will fairly and adequately protect the interests of the members of the
23 Class and has retained counsel competent and experienced in class and securities litigation.
24 Plaintiff has no interests antagonistic to or in conflict with those of the Class.
25
27.
Common questions of law and fact exist as to all members of the Class and
26 predominate over any questions solely affecting individual members of the Class. Among the
27 questions of law and fact common to the Class are:
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1
•
2
3
whether the federal securities laws were violated by Defendants’ acts as alleged
herein;
•
whether statements made by Defendants to the investing public during the Class
4
Period misrepresented material facts about the business, operations and
5
management of TerraVia;
6
•
7
8
statements during the Class Period;
•
9
10
•
whether the prices of TerraVia securities during the Class Period were artificially
inflated because of the Defendants’ conduct complained of herein; and,
•
13
14
whether Defendants acted knowingly or recklessly in issuing false and misleading
statements;
11
12
whether the Individual Defendants caused TerraVia to issue false and misleading
whether the members of the Class have sustained damages and, if so, what is the
proper measure of damages.
28.
A class action is superior to all other available methods for the fair and efficient
15 adjudication of this controversy since joinder of all members is impracticable. Furthermore, as
16 the damages suffered by individual Class members may be relatively small, the expense and
17 burden of individual litigation make it impossible for members of the Class to individually
18 redress the wrongs done to them. There will be no difficulty in the management of this action as
19 a class action.
20
29.
Plaintiff will rely, in part, upon the presumption of reliance established by the
21 fraud-on-the-market doctrine in that:
22
•
Defendants made public misrepresentations or failed to disclose material facts
during the Class Period;
23
24
•
the omissions and misrepresentations were material;
25
•
TerraVia securities are traded in efficient markets;
26
•
the Company’s shares were liquid and traded with moderate to heavy volume
27
during the Class Period;
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1
•
the Company traded on NASDAQ, and was covered by multiple analysts;
2
•
the misrepresentations and omissions alleged would tend to induce a reasonable
3
4
investor to misjudge the value of the Company’s securities; and
•
Plaintiff and members of the Class purchased and/or sold TerraVia securities
5
between the time the Defendants failed to disclose or misrepresented material
6
facts and the time the true facts were disclosed, without knowledge of the omitted
7
or misrepresented facts.
8
30.
Based upon the foregoing, Plaintiff and the members of the Class are entitled to a
9 presumption of reliance upon the integrity of the market.
10
31.
Alternatively, Plaintiff and the members of the Class are entitled to the
11 presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State
12 of Utah v. United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material
13 information in their Class Period statements in violation of a duty to disclose such information,
14 as detailed above.
15
COUNT I
Violation of Section 10(b) Of
The Exchange Act Against and Rule 10b-5
Promulgated Thereunder Against All Defendants
16
17
18
32.
Plaintiff repeats and realleges each and every allegation contained above as if
19 fully set forth herein.
20
33.
During the Class Period, Defendants carried out a plan, scheme and course of
21 conduct which was intended to and, throughout the Class Period, did: (1) deceive the investing
22 public, including plaintiff and other Class members, as alleged herein; and (2) cause plaintiff and
23 other members of the Class to purchase TerraVia’s securities at artificially inflated prices. In
24 furtherance of this unlawful scheme, plan and course of conduct, Defendants, and each of them,
25 took the actions set forth herein.
26
34.
Defendants (a) employed devices, schemes, and artifices to defraud; (b) made
27 untrue statements of material fact and/or omitted to state material facts necessary to make the
28
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1 statements not misleading; and (c) engaged in acts, practices, and a course of business that
2 operated as a fraud and deceit upon the purchasers of the Company’s common stock in an effort
3 to maintain artificially high market prices for TerraVia’s securities in violation of Section 10(b)
4 of the Exchange Act and Rule 10b-5 thereunder. All Defendants are sued either as primary
5 participants in the wrongful and illegal conduct charged herein or as controlling persons as
6 alleged below.
7
35.
Defendants, individually and in concert, directly and indirectly, by the use, means
8 or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a
9 continuous course of conduct to conceal adverse material information about the business,
10 operations and future prospects of TerraVia as specified herein.
11
36.
These Defendants employed devices, schemes and artifices to defraud, while in
12 possession of material adverse non-public information and engaged in acts, practices, and a
13 course of conduct as alleged herein in an effort to assure investors of TerraVia value and
14 performance and continued substantial growth, which included the making of, or participation in
15 the making of, untrue statements of material facts and omitting to state material facts necessary
16 in order to make the statements made about TerraVia and its business operations and future
17 prospects in the light of the circumstances under which they were made, not misleading, as set
18 forth more particularly herein, and engaged in transactions, practices and a course of business
19 that operated as a fraud and deceit upon the purchasers of TerraVia securities during the Class
20 Period.
21
37.
Each of the Defendants’ primary liability, and controlling person liability, arises
22 from the following facts: (1) Individual Defendants were high-level executives, directors, and/or
23 agents of the Company during the Class Period and members of the Company’s management
24 team or had control thereof; (2) each of these Defendants, by virtue of his responsibilities and
25 activities as a senior officer and/or director of the Company, was privy to and participated in the
26 creation, development and reporting of the Company’s financial condition; (3) each of these
27 defendants enjoyed significant personal contact and familiarity with the other defendants and
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1 was advised of and had access to other members of the Company’s management team, internal
2 reports and other data and information about the Company’s finances, operations, and sales at all
3 relevant times; and (4) each of these defendants was aware of the Company’s dissemination of
4 information to the investing public which they knew or recklessly disregarded was materially
5 false and misleading.
6
38.
Defendants had actual knowledge of the misrepresentations and omissions of
7 material facts set forth herein, or acted with reckless disregard for the truth in that they failed to
8 ascertain and to disclose such facts, even though such facts were available to them. Such
9 Defendants’ material misrepresentations and/or omissions were done knowingly or recklessly.
10
39.
As a result of the dissemination of the materially false and misleading information
11 and failure to disclose material facts, as set forth above, the market price of TerraVia’s securities
12 was artificially inflated during the Class Period. In ignorance of the fact that market prices of
13 TerraVia’s publicly-traded securities were artificially inflated, and relying directly or indirectly
14 on the false and misleading statements made by Defendants, or upon the integrity of the market
15 in which the securities trade, and/or on the absence of material adverse information that was
16 known to or recklessly disregarded by Defendants but not disclose in public statements by
17 Defendants during the Class Period, Plaintiff and the other members of the Class acquired
18 TerraVia securities during the Class Period at artificially high prices and were or will be
19 damaged thereby.
20
40.
At the time of said misrepresentations and omissions, Plaintiff and other members
21 of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the
22 other members of the Class and the marketplace known the truth regarding TerraVia financial
23 results, which were not disclosed by Defendants, Plaintiff and other members of the Class would
24 not have purchased or otherwise acquired their TerraVia securities, or, if they had acquired such
25 securities during the Class Period, they would not have done so at the artificially inflated prices
26 that they paid.
27
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1
41.
By virtue of the foregoing, Defendants have violated Section 10(b) of the
2 Exchange Act, and Rule 10b-5 promulgated thereunder.
3
42.
As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and
4 the other members of the Class suffered damages in connection with their respective purchases
5 and sales of the Company’s common stock during the Class Period.
6
43.
This action was filed within two years of discovery of the fraud and within five
7 years of each plaintiff’s purchases of securities giving rise to the cause of action.
8
COUNT II
Violation of Section 20(a) Of
The Exchange Act Against Individual Defendants
9
10
44.
11
Plaintiff repeats and realleges each and every allegation contained above as if
fully set forth herein.
12
13
14
45.
Individual Defendants are sued herein as a controlling person of TerraVia.
46.
By virtue of their high-level positions, agency, and their ownership and
contractual rights, participation in and/or awareness and/or intimate knowledge of the misleading
15
statements disseminated to the investing public, these defendants had the power to influence and
16
control, and did influence and control, directly or indirectly, the decision-making of the primary
17
violator, including the content and dissemination of the various statements that plaintiff contends
18
19
are false and misleading. In particular, each defendant had the power to control or influence the
particular transactions giving rise to the securities violations as alleged herein, and exercised the
20
same.
21
47.
As set forth above, TerraVia violated Section 10(b) and Rule 10b-5 by their acts
22
and omissions as alleged in this Complaint.
23
48.
By virtue of their positions as controlling persons, the Individual Defendants are
24
liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of
25
26
Defendants’ wrongful conduct, Plaintiff and other members of the Class suffered damages in
connection with their purchases of the Company’s common stock during the Class Period.
27
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1
49.
This action was filed within two years of discovery of the fraud and within five
2 years of each Plaintiff’s purchases of securities giving rise to the cause of action.
3
4
5
6
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for relief and judgment, as follows:
A.
Determining that this action is a proper class action, designating Plaintiff as class
7 representative under Rule 23 of the Federal Rules of Civil Procedure and Plaintiff’s counsel as
8 Class Counsel;
9
B.
Awarding compensatory damages in favor of Plaintiff and the other Class
10 members against all defendants, jointly and severally, for all damages sustained as a result of
11 Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon;
12
C.
Awarding Plaintiff and the Class their reasonable costs and expenses incurred in
13 this action, including counsel fees and expert fees;
14
D.
Such other and further relief as the Court may deem just and proper.
15
16
JURY TRIAL DEMANDED
Plaintiff hereby demands a trial by jury.
17
18
19
Dated: November 16, 2016
Respectfully submitted,
20
THE ROSEN LAW FIRM, P.A.
21
25
/s/ Laurence M. Rosen
Laurence M. Rosen, Esq. (SBN 219683)
355 S. Grand Avenue, Suite 2450
Los Angeles, CA 90071
Telephone: (213) 785-2610
Facsimile: (213) 226-4684
Email: [email protected]
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Counsel for Plaintiff
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- 14 CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL
SECURITIES LAWS
Case 3:16-cv-06633-JD Document 1-1 Filed 11/16/16 Page 1 of 2
Certification and Authorization of Named Plaintiff Pursuant to
Federal Securities Laws
The individual or institution listed below (the "Plaintiff") authorizes and, upon execution of the
accompanying retainer agreement by The Rosen Law Firm P.A., retains The Rosen Law Firm P.A.
to file an action under the federal securities laws to recover damages and to seek other relief
against TerraVia Holdings, Inc.. The Rosen Law Firm P.A. will prosecute the action on a contingent
fee basis and will advance all costs and expenses. The TerraVia Holdings, Inc.. Retention
Agreement provided to the Plaintiff is incorporated by reference, upon execution by The Rosen Law
Firm P.A.
First name:
Middle initial:
Last name:
Address:
City:
State:
Zip:
Country:
Facsimile:
Phone:
Email:
Ruben
R.
Perales
REDACTED
Plaintiff certifies that:
1. Plaintiff has reviewed the complaint and authorized its filing.
2. Plaintiff did not acquire the security that is the subject of this action at the direction of plaintiff's
counsel or in order to participate in this private action or any other litigation under the federal
securities laws.
3. Plaintiff is willing to serve as a representative party on behalf of a class, including providing
testimony at deposition and trial, if necessary.
4. Plaintiff represents and warrants that he/she/it is fully authorized to enter into and execute this
certification.
5. Plaintiff will not accept any payment for serving as a representative party on behalf of the class
beyond the Plaintiff's pro rata share of any recovery, except such reasonable costs and
expenses (including lost wages) directly relating to the representation of the class as ordered or
approved by the court.
6. Plaintiff has made no transaction(s) during the Class Period in the debt or equity securities that
are the subject of this action except those set forth below:
Acquisitions:
Type of Security
Common Stock
Common Stock12/31/14
Common Stock02/03/15
Common Stock04/15/15
Common Stock09/02/15
Common Stock05/31/16
Common Stock08/11/16
Common Stock09/15/16
Common Stock09/16/16
Common Stock12/29/14
Common Stock08/21/15
Buy Date
12/30/14
500
500
200
300
250
250
400
400
500
1000
# of Shares
500
2.519
2.44
4.0999
2.25
2.53
2.385
2.54
2.59
2.7099
4.0999
Price per Share
2.66
Case 3:16-cv-06633-JD Document 1-1 Filed 11/16/16 Page 2 of 2
Certification for Ruben Perales (cont.)
Sales:
Type of Security
Common Stock11/09/16
Sale Date
# of Shares
4800
1.55
Price per Share
7. I have not served as a representative party on behalf of a class under the federal securities laws
during the last three years, except if detailed below. [ ]
I declare under penalty of perjury, under the laws of the
United States, that the information entered is accurate:
YES
By clicking on the button below, I intend to sign and execute
this agreement and retain the Rosen Law Firm, P.A. to
proceed on Plaintiff's behalf, on a contingent fee basis.
YES
Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic
Transactions Act as adopted by the various states and territories of the United States.
Date of signing: 11/15/2016
Case 3:16-cv-06633-JD Document 1-2 Filed 11/16/16 Page 1 of 2
JS-CAND 44 (Rev. 07/16)
CIVIL COVER SHEET
The JS-CAND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law,
except as provided by local rules of court. This form, approved in its original form by the Judicial Conference of the United States in September 1974, is required for the Clerk of
Court to initiate the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
I. (a) PLAINTIFFS
DEFENDANTS
RUBEN PERALES, Individually and on behalf of all
others similarly situated,
(b)
County of Residence of First Listed Plaintiff
TERRAVIA HOLDINGS, INC., JONATHAN S.
WOLFSON, APU MODY, and TYLER W. PAINTER,
County of Residence of First Listed Defendant
Bexar County, Texas
(EXCEPT IN U.S. PLAINTIFF CASES)
(IN U.S. PLAINTIFF CASES ONLY)
IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.
Attorneys (If Known)
NOTE:
(c)
Attorneys (Firm Name, Address, and Telephone Number)
The Rosen Law Firm, P.A., Laurence M. Rosen
355 South Grand Avenue, Suite 2450, Los Angeles, CA 90071
Tel: (213) 785-2610; email: [email protected]
II. BASIS OF JURISDICTION (Place an “X” in One Box Only)
1
2
U.S. Government
Plaintiff
3 Federal Question
(U.S. Government Not a Party)
U.S. Government
Defendant
4 Diversity
(Indicate Citizenship of Parties in Item III)
IV. NATURE OF SUIT
CONTRACT
(For Diversity Cases Only)
PTF
(Place an “X” in One Box Only)
TORTS
110 Insurance
120 Marine
130 Miller Act
140 Negotiable Instrument
150 Recovery of Overpayment
Of Veteran’s Benefits
151 Medicare Act
152 Recovery of Defaulted
Student Loans
(Excludes Veterans)
153 Recovery of Overpayment
of Veteran’s Benefits
160 Stockholders’ Suits
190 Other Contract
195 Contract Product Liability
196 Franchise
REAL PROPERTY
210 Land Condemnation
220 Foreclosure
230 Rent Lease & Ejectment
240 Torts to Land
245 Tort Product Liability
290 All Other Real Property
2 Removed from
State Court
3 Remanded from
Appellate Court
and One Box for Defendant)
PTF
DEF
DEF
Citizen of This State
1
1 Incorporated or Principal Place
of Business In This State
4
4
Citizen of Another State
2
2 Incorporated and Principal Place
of Business In Another State
5
5
Citizen or Subject of a
Foreign Country
3
3 Foreign Nation
6
6
FORFEITURE/PENALTY
PERSONAL INJURY
PERSONAL INJURY
310 Airplane
365 Personal Injury –
315 Airplane Product
Product Liability
Liability
367 Health Care/
320 Assault, Libel &
Pharmaceutical
Slander
Personal Injury
330 Federal Employers’
Product Liability
Liability
368 Asbestos Personal
340 Marine
Injury Product
345 Marine Product
Liability
Liability
PERSONAL PROPERTY
350 Motor Vehicle
370 Other Fraud
355 Motor Vehicle
371 Truth in Lending
Product Liability
380 Other Personal
Property Damage
360 Other Personal
Injury
385 Property Damage
362 Personal Injury Product Liability
Medical Malpractice
CIVIL RIGHTS
PRISONER PETITIONS
Habeas Corpus:
440 Other Civil Rights
441 Voting
463 Alien Detainee
442 Employment
510 Motions to Vacate
Sentence
443 Housing/
Accommodations
530 General
535 Death Penalty
445 Amer. w/Disabilities–
Employment
Other:
540 Mandamus & Other
446 Amer. w/Disabilities–
Other
550 Civil Rights
448 Education
555 Prison Condition
560 Civil Detainee–
Conditions of
Confinement
V. ORIGIN (Place an “X” in One Box Only)
1 Original
Proceeding
III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
BANKRUPTCY
625 Drug Related Seizure
of Property 21 USC § 881
690 Other
422 Appeal 28 USC § 158
423 Withdrawal
28 USC § 157
PROPERTY RIGHTS
820 Copyrights
830 Patent
840 Trademark
LABOR
710 Fair Labor Standards
Act
720 Labor/Management
Relations
740 Railway Labor Act
751 Family and Medical
Leave Act
790 Other Labor Litigation
791 Employee Retirement
Income Security Act
SOCIAL SECURITY
861 HIA (1395ff)
862 Black Lung (923)
863 DIWC/DIWW (405(g))
864 SSID Title XVI
865 RSI (405(g))
FEDERAL TAX SUITS
870 Taxes (U.S. Plaintiff
or Defendant)
871 IRS–Third Party
26 USC § 7609
IMMIGRATION
462 Naturalization Application
465 Other Immigration
Actions
4 Reinstated or
Reopened
5 Transferred from
Another District
6 Multidistrict
Litigation–Transfer
(specify)
OTHER STATUTES
375 False Claims Act
376 Qui Tam (31 USC
§ 3729(a))
400 State Reapportionment
410 Antitrust
430 Banks and Banking
450 Commerce
460 Deportation
470 Racketeer Influenced and
Corrupt Organizations
480 Consumer Credit
490 Cable/Sat TV
850 Securities/Commodities/
Exchange
890 Other Statutory Actions
891 Agricultural Acts
893 Environmental Matters
895 Freedom of Information
Act
896 Arbitration
899 Administrative Procedure
Act/Review or Appeal of
Agency Decision
950 Constitutionality of
State Statutes
8 Multidistrict
Litigation–Direct File
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
VI. CAUSE OF ACTION
17 C.F.R. 240.10b-5, Sections 10(b) and 20(a) of the Exchange Act
Brief description of cause:
Allegations of violations of the federal securities laws.
DEMAND $
VII. REQUESTED IN ✔ CHECK IF THIS IS A CLASS ACTION
UNDER RULE 23, Fed. R. Civ. P.
COMPLAINT:
VIII. RELATED CASE(S),
IF ANY (See instructions):
JUDGE
IX. DIVISIONAL ASSIGNMENT (Civil Local Rule 3-2)
(Place an “X” in One Box Only)
SAN FRANCISCO/OAKLAND
DATE: 11/16/2016
CHECK YES only if demanded in complaint:
JURY DEMAND:
Yes
No
DOCKET NUMBER
SAN JOSE
EUREKA-MCKINLEYVILLE
SIGNATURE OF ATTORNEY OF RECORD: /s/Laurence M. Rosen
JS-CAND 44 (rev. 07/16)
Case 3:16-cv-06633-JD Document 1-2 Filed 11/16/16 Page 2 of 2
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS-CAND 44
Authority For Civil Cover Sheet. The JS-CAND 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and
service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved in its original form by the Judicial
Conference of the United States in September 1974, is required for the Clerk of Court to initiate the civil docket sheet. Consequently, a civil cover sheet is
submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I. a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the “defendant” is the location of the tract of land involved.)
c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section “(see attachment).”
II.
Jurisdiction. The basis of jurisdiction is set forth under Federal Rule of Civil Procedure 8(a), which requires that jurisdictions be shown in
pleadings. Place an “X” in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
(1) United States plaintiff. Jurisdiction based on 28 USC §§ 1345 and 1348. Suits by agencies and officers of the United States are included here.
(2) United States defendant. When the plaintiff is suing the United States, its officers or agencies, place an “X” in this box.
(3) Federal question. This refers to suits under 28 USC § 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code
takes precedence, and box 1 or 2 should be marked.
(4) Diversity of citizenship. This refers to suits under 28 USC § 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)
III.
Residence (citizenship) of Principal Parties. This section of the JS-CAND 44 is to be completed if diversity of citizenship was indicated above.
Mark this section for each principal party.
IV.
Nature of Suit. Place an “X” in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.
V.
Origin. Place an “X” in one of the six boxes.
(1) Original Proceedings. Cases originating in the United States district courts.
(2) Removed from State Court. Proceedings initiated in state courts may be removed to the district courts under Title 28 USC § 1441. When the
petition for removal is granted, check this box.
(3) Remanded from Appellate Court. Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
(4) Reinstated or Reopened. Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
(5) Transferred from Another District. For cases transferred under Title 28 USC § 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
(6) Multidistrict Litigation Transfer. Check this box when a multidistrict case is transferred into the district under authority of Title 28 USC
§ 1407. When this box is checked, do not check (5) above.
(8) Multidistrict Litigation Direct File. Check this box when a multidistrict litigation case is filed in the same district as the Master MDL docket.
Please note that there is no Origin Code 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute.
VI.
Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC § 553. Brief Description: Unauthorized reception of cable service.
VII. Requested in Complaint. Class Action. Place an “X” in this box if you are filing a class action under Federal Rule of Civil Procedure 23.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS-CAND 44 is used to identify related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.
IX.
Divisional Assignment. If the Nature of Suit is under Property Rights or Prisoner Petitions or the matter is a Securities Class Action, leave this
section blank. For all other cases, identify the divisional venue according to Civil Local Rule 3-2: “the county in which a substantial part of the
events or omissions which give rise to the claim occurred or in which a substantial part of the property that is the subject of the action is situated.”
Date and Attorney Signature. Date and sign the civil cover sheet.