Leading U.S. LED luminaire manufacturer TCP International’s (TCP) stock ratings have taken a blow following a complaint filed against the company and CEO by its general counsel Laura Hauser.
The company’s shares tumbled more than 57% to US$ 2.74 on Feb. 27, shortly after Hauser’s complaint was made public. TCP shares closed at around US $2.71 on March 3, 2015. A total of 2,153,042 shares had exchanged hands till close, noted a Wall Street Pulse report.
Since the incident, Canadian financial institute Canaccord Genuity Group announced it will be suspending coverage on TCP, according to a Smart Analyst report.
“Effective immediately, we are suspending coverage of TCP following the filing of a lawsuit against the company and its CEO,” wrote Canaccord Genuity analyst Jed Dorsheimer. “Our final rating on the shares was a BUY; however, such rating and our prior estimates and price target should no longer be relied upon.”
Analysts at Piper Jaffray have even downgraded TCP share ratings from “overweight” to “neutral,” reported Intercooler.
In the plaintiff filed by Hauser, she alleged the company of misusing the UL labels on unqualified LED luminaires, violating laws, and unethical business practices.
She also alleged the company CEO Ellis Yan for physically assaulting and verbally threatening her, disregarding company protocols, and "damaging the value of the company."
Yan could not be reached for further comments. In a latest press release, the company stated it will not address Hauser’s personal allegations against Yan, but will probe into business misconduct issues and legal violations listed in the complaint.
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