Orion Energy Systems raised $78 million in an IPO and the CEO sold $7 million in his stock, then weeks later Orion revealed a substantial change in its buisness model, which may not have been adequately disclosed during the IPO.

This is a securities fraud class action lawsuit against Orion Energy Systems, Inc. and certain officers and directors.

The class action lawsuit alleges that with respect to the IPO, Orion realized over $78 million in proceeds, while its Chief Executive Officer and family sold 600,000 shares for proceeds of approximately $7 million.

On February 6, 2008, just weeks after its IPO, Orion revealed news concerning Orion which completely surprised analysts and investors, and caused the stock to drop approximately 43%, to a price of $8.51 per share.

Orion is a manufacturer of efficient lighting and energy systems to businesses. The Prospectus for its IPO described a company that was quickly growing revenues from existing product lines, and briefly described product line extensions. After the close of trading on February 6, 2008, Orion revealed that revenues in its current fiscal quarter would decline as Orion took aggressive measures to promote a "new business model," a change in focus that is alleged not to have been adequately disclosed or described in the IPO Prospectus.

During the February 6, 2008 conference call, Orion executives, including the CEO, appeared unable to explain to the satisfaction of securities analysts this surprising news about the business model change on the heels of the IPO, or its impact on revenues.

The complaint charges Orion, certain of its officers and directors and the underwriters who sponsored the IPO with violation of the federal securities laws by issuing a Registration Statement and Prospectus in connection with the IPO which was materially false or misleading due to omissions.