Luna Innovations Incorporated (LUNA) Securities Fraud Class Action

On Apr. 19, 2024, shares in Luna Innovations crashed after the fiber optics company revealed that its anticipated restatement of prior financial statements has expanded to now cover all of 2022 in addition to the first quarter of 2023, as a result of accounting errors.

The bombshell dropped after Luna's Audit Committee, with the help of external advisors, unearthed critical errors in how the company recognized revenue in financial filings dating back to Mar. 31, 2022. Luna says these accounting errors resulted in misstated financial results and that previously issued reports, press releases, and any communication regarding the affected periods should not be relied upon. The company’s independent auditor, Ernst & Young LLP, is also included in this caution.

The Roanoke-based company’s latest revelation follows its Mar. 12, 2024 admission that it improperly recognized revenue during the quarters ended June 30, 2023 and Sept. 30, 2023. Less than two weeks later, on Mar. 24, 2024 the company’s CEO Scott Graeff abruptly left the company.

Luna has not yet quantified the improperly recorded revenues, but these disclosures have sent Luna’s share price on a tailspin, as its stock has lost more than half its value.

Luna’s improper revenue recognition has also led to an investor class action. While Hagens Berman is investigating the expansion of the current period, the existing securities class action brought on behalf of Luna investors against both Luna and its senior executives alleges that Defendants made misleading statements and failed to disclose that: (1) Luna’s financial statements from Aug. 10, 2023 to the present included false figures as a result of improper revenue recognition; (2) as a result, Luna would be required to restate financial statements filed during Aug. 10, 2023 through Nov. 14, 2023; and (3) it lacked adequate internal controls.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the LUNA securities class-action case about?

We’re investigating whether the alleged fraudulent period should be expanded based on Luna’s latest disclosure.

WHAT SHOULD I DO?

I worked at LUNA. What should I do?

If you were an employee of LUNA, you may have valuable information that could be relevant to the lawsuit. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICPATE?

Am I affected? What do I need to do to participate?

If you were an investor in LUNA, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any LUNA investor participate?

In most class-action cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.