Judge J. Paul Oetken
Chinese solar firm Jinkosolar’s environmental missteps followed a 2009 acquisition. Prospectuses and statements related to its 2010 initial public offering on the New York Stock Exchange, and a 2012 offering, asserted compliance with China’s environmental laws governing hazardous waste discharges. The value of Jinkosolar’s shares fell 41 percent when, between Sept. 15 and 20, 2011, news of environmental contamination at its plant in Zhenjiang province became public. Under the Private Securities Litigation Reform Act, district court dismissed the lead plaintiffs’ putative class suit alleging securities fraud by Jinkosolar—and its officers and underwriters—violating the Securities Exchange Act of 1934 and the Securities Act of 1933. The court found that no reasonable investor could have believed the prospectuses guaranteed a positive environmental record. Because the prospectuses did not create a “total impression” that Jinkosolar was “a model of environmental rectitude,” plaintiffs did not adequately plead a material misstatement or omission. Because there were no material misstatements or omissions in defendants’ prospectuses, plaintiffs’ Securities Act claims failed as a matter of law.