A California land and water resource development company is facing a federal securities class action lawsuit over allegations it filed false statements with the U.S. Securities and Exchange Commission.
Nickolas Van Wingerden filed the lawsuit on April 24 in the United States District Court Central District of California against Cadiz Inc., claiming a form filed on March 10, 2014, contained the false statements.
Cadiz owns about 70 square miles of property in San Bernardino County on the eastern side of the Mojave Desert. The lawsuit said the company's main project is the Cadiz Valley Water Conservation, Recovery and Storage Project, which captures and conserves billions of gallons of groundwater under the desert.
The lawsuit stems from a September 2008 agreement between Cadiz and the Arizona & California Railroad to allow Cadiz to use the railroad's right-of-way to construct a 42-mile water conveyance pipeline in the Mojave Desert.
However, in 2011 the U.S. Solicitor's Office ruled a railroad can only authorize activities within a right-of-way if it is for “railroad purposes.” The lawsuit claims Cadiz filed statements with the SEC in March 2014 stating the company didn't believe federal right-of-way approval was required.
On April 21, 2015, a report was published on a website that allegedly revealed Cadiz knew the pipeline project was not a railroad purpose, and was therefore “unviable.” Upon that news, Cadiz's stock fell $1.06 per share.
Van Wingerden is seeking class status for individuals who held Cadiz stock between March 10, 2014, and April 21, 2015, and an unspecified amount of damages.
He is represented by Laurence Rosen of The Rosen Law Firm, P.A. in Los Angeles.
United States District Court Central District of California case number 2:15-cv-03080.