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A class action lawsuit has been filed against a photovoltaic (PV) solar energy company and executives who allegedly misled investors into believing that United States tariffs posed little threat to the company’s financials.
According to court documents filed in the Eastern District of New York, First Solar and two officials are accused of assuring U.S. investors that, despite an unpredictable U.S. trade policy and idling of factories in Malaysia and Vietnam, the company’s competitive position was stable and its long-term outlook remained favorable.
The class action suit argues the company was instead failing to meet financial expectations, leading investors to buy shares at artificially inflated prices.
Investor Claims Risk Downplayed
First Solar, which manufactures solar modules in Malaysia and Vietnam and has ties to flat glass manufacturers to procure its low-iron, high-transmittance glass, announced that it would reduce production output of its Series 6 modules at facilities in Malaysia and Vietnam after the White House imposed reciprocal tariffs on imports from the two countries.
First Solar said the idling provided “optionality” while awaiting clarity on tariffs.
The lawsuit argues, however, that First Solar “understated the extent to which its responses to U.S. tariff policy, including the intentional underutilization of production facilities in Malaysia and Vietnam, and attempted relocation of production to the U.S., were likely to negatively impact First Solar’s projected performance in the 2026 fiscal year.”
The lawsuit also notes that throughout 2025, First Solar officials told investors that demand for energy in the U.S. would grow moving forward, given the federal government’s economic policy platform, and that solar energy would be the most efficient way to fill that demand. Officials added that “sales contracts for international product deliveries typically have some form of tariff protection.”
The complaint alleges that despite the positive narratives, officials knew the company faced financial pressures and that demand for international products was weaker than investors were led to believe.
Analyst Downgrade and Market Reaction
The lawsuit states that on Jan. 7, 2026, Jefferies Financial Group downgraded First Solar’s stock after the company had “lowered guidance, faced significant de-bookings and experienced margin compression through 2025.” The bank also predicted that First Solar’s deployment opportunities would be limited in 2026.
The suit states that after the downgrade, First Solar’s shares continued to trade at artificially inflated prices due to its “continued false and misleading statements about the challenges presented by a U.S. tariff policy, and the risk that actions taken to address this policy landscape.” One of the statements included a press release that First Solar issued stating that it could continue to “deliver long-term economic value.”
Shortly after that press release, First Solar released its financial results for the fourth quarter and year ended Dec. 31, 2026. The results showed that the company missed expectations “by a wide margin,” with officials announcing net sales guidance for the fiscal year 2026 of roughly $4.9 billion and $5.2 billion, below consensus estimates of $6.16 billion. This news caused the company’s shares to fall nearly 14%, causing investors to “suffer significant losses and damages.”
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