Bloom Energy Lawsuit: Restatement, Settlement, and Appeal

The Bloom Energy lawsuit was a securities fraud class action brought by investors who said the fuel cell company misled them in its July 2018 initial public offering and in financial statements it later had to restate. The case, Hunt v. Bloom Energy Corp., settled for $3 million in 2024, and a related appeal against the company’s auditor ended in November 2025 when the Ninth Circuit affirmed the auditor’s dismissal from the case.¹

What Investors Alleged

Investors said Bloom Energy’s IPO registration statement contained material misrepresentations and omissions in violation of the Securities Act. The complaint alleged the company concealed significant construction delays that were interfering with installations and failed to disclose problems with the efficiency of its energy server technology.²

The stock had been priced at $15 in the July 25, 2018 offering. Within roughly a year it was trading under $3, pushed down in part by a September 2019 report from short-seller Hindenburg Research questioning the company’s debt, the actual lifespan of its fuel cells, and its accounting for sale-leaseback contracts known as Managed Services Agreements.³

The class period covered investors who bought Bloom Energy common stock from July 25, 2018 through March 31, 2020.⁴

The 2020 Accounting Restatement

On February 12, 2020, Bloom Energy told investors its Audit Committee had concluded the company’s financial statements for 2018 and parts of 2019 could no longer be relied upon. The problem was how the company had accounted for its Managed Services Agreements. Bloom had been recording most of them as sales and booking revenue at the time of installation. The company and its auditor, PricewaterhouseCoopers, concluded the agreements should have been treated as financing transactions, with revenue spread over the life of each contract.⁵

Bloom estimated the restatement would reduce reported net revenue by $165 million to $180 million, raise its operating loss by $20 million to $35 million, and raise its net loss by $55 million to $75 million. The company said the reclassification did not affect total cash flows and was not the result of misconduct or a deliberate override of internal controls.⁵

The market reaction was sharp. Shares had closed at $10.46 on February 12 and fell more than 20% in after-hours trading that evening.³ After the disclosure, the court overseeing the class action ordered plaintiffs to file an amended complaint incorporating the new accounting information.²

Who Was Sued

The original complaint was filed on May 28, 2019 in the U.S. District Court for the Northern District of California.⁶ James Everett Hunt was appointed lead plaintiff that September, and the case proceeded as Hunt v. Bloom Energy Corp., Case No. 4:19-cv-02935, before Judge Haywood S. Gilliam Jr.⁷

Defendants included Bloom Energy itself, CEO KR Sridhar, CFO Randy Furr, several directors, ten underwriters that handled the IPO (among them J.P. Morgan Securities, Morgan Stanley, and Credit Suisse Securities), and auditor PricewaterhouseCoopers.⁸ PwC was dismissed from the case at the district court level in September 2021.²

The $3 Million Settlement

In December 2023, the parties announced a proposed settlement of $3 million covering all investors who acquired Bloom Energy common stock either through the IPO registration statement or on the open market during the class period. None of the defendants admitted wrongdoing.²

Judge Gilliam granted final approval on May 6, 2024. No class members objected, and only four opted out.¹ The court awarded class counsel $900,000 in attorneys’ fees, or 30% of the fund. The estimated average recovery came to roughly four cents per share before fees and costs.⁹ Claims administration was handled by Epiq, and the settlement fund has since been disbursed.¹⁰

The Appeal Against PricewaterhouseCoopers

Investors appealed PwC’s 2021 dismissal to the U.S. Court of Appeals for the Ninth Circuit, arguing the firm should be held strictly liable under Section 11 of the Securities Act for certifying the 2017 financial statements that contained the flawed MSA accounting.

On November 10, 2025, the Ninth Circuit affirmed the dismissal in Hunt v. PricewaterhouseCoopers LLP, No. 24-3568. Writing for the panel, Judge N. Randy Smith held that Section 11 does not impose strict liability on independent accountants. Auditors are instead subject to a negligence standard and are entitled to a due diligence defense. Applying the Supreme Court’s framework from Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (2015), the court ruled that an auditor’s statement that financial results “present fairly, in all material respects” is a professional opinion rather than a guarantee of factual accuracy. Because the MSA classification involved subjective professional judgment, PwC’s opinion was not actionable unless investors could show it was not sincerely held, contained false embedded facts, or omitted misleading context. The court found investors had made none of those showings.¹¹

The ruling emphasized that Bloom Energy’s management bore responsibility for preparing the financial statements and selecting accounting policies. PwC’s role was limited to expressing an opinion based on its audit, and the court concluded the firm did not “make, own, or adopt” the assertions in those statements.¹¹

The Delaware Books-and-Records Case

Separate from the federal class action, Bloom Energy stockholders Dennis Jacob and Michael Bolouri filed a Section 220 action in the Delaware Court of Chancery seeking to inspect the company’s books and records. Their stated goal was to investigate possible mismanagement and fiduciary breaches, and they leaned on the Hindenburg report as evidence of possible wrongdoing.

In a February 25, 2021 ruling in Jacob v. Bloom Energy Corp., C.A. No. 2020-0023-JRS, the court granted a limited inspection right to Jacob while denying Bolouri’s demand on procedural grounds for failing to provide adequate proof of stock ownership. The court found the Hindenburg report provided a “credible basis” to suspect wrongdoing, meeting what it called the lowest burden of proof under Delaware law. Bloom had argued the short-seller’s financial incentive to drive down the stock price made its report unreliable and pointed to its own SEC Form 8-K as a rebuttal. The court noted the 8-K actually acknowledged the company had misstated its financials in prior reporting periods. The inspection scope was narrowed, however: the court denied Jacob’s request for emails and other electronic communications between board members, ruling that formal board-level materials would suffice.¹²

Where Things Stand Now

The $3 million class action settlement has been fully disbursed, and the underlying case is closed. The Ninth Circuit’s November 2025 ruling affirming PwC’s dismissal resolved the last active appellate proceeding stemming from the litigation. No new claims related to the IPO or the 2020 restatement appear to be pending.

1
Bloomberg Law. Bloom Energy Gets $3 Million Class Settlement Over IPO Finalized
2
Bloomberg Law. Bloom Energy Gets Nod to Settle IPO Class Action for $3 Million
3
MarketWatch. Bloom Energy Has Provided Incorrect Financial Results Since IPO, Stock Sinks More Than 20%
4
Kessler Topaz Meltzer Check LLP. Bloom Energy Corporation Securities Fraud Class Action
5
SEC. Bloom Energy Corporation Form 8-K
6
CourtListener. Roberts v. Bloom Energy Corporation
7
GovInfo. Roberts v. Bloom Energy Corporation, Case No. 4:19-cv-02935-HSG
8
PR Newswire. Levi and Korsinsky LLP Announces Pendency of Class Action Involving Purchasers of Bloom Energy Corporation Common Shares
9
Shareholders Foundation. Bloom Energy Securities Litigation Settlement Notice
10
Levi & Korsinsky LLP. Bloom Energy Corporation Settlement
11
U.S. Court of Appeals for the Ninth Circuit. Hunt v. PricewaterhouseCoopers LLP, No. 24-3568
12
Morris James LLP. Chancery Grants Inspection Demand Relying on a Short Seller’s Report