A federal court has denied in part a motion to dismiss a securities class action complaint against Origin Materials, Inc. and its CEO, John Bissell. Judge William B. Shubb of the U.S. District Court for the Eastern District of California ruled that claims alleging the company intentionally misled investors could proceed.
The lawsuit alleges that Origin Materials made false and misleading statements between February 2023 and August 2023 regarding the production focus and timeline for its Origin 2 manufacturing plant. Specifically, it claims the company misrepresented its ability to meet the construction timeline, the demand for paraxylene (PX) as a production focus, and the cost and scale of the plant.
When the truth about the Origin 2 project's delays and change in production focus was revealed in August 2023, Origin's stock experienced a 67% decline. The court's decision to allow the claims to proceed indicates that the complaint sufficiently alleged that the defendants made false and misleading statements with an intent to defraud.
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