July 29, 2026  ·  Complaint filed July 28, 2026  ·  nyed, No. 1:26-cv-04555

Newman News, By David Brunk

Read the filing

Ho v. Widmar Alleges First Solar Directors Hid Tariff Risks While Selling Stock

Shareholder Says CEO Mark Widmar Called Tariffs "Long-Term Favorable" as Southeast Asia Factories Sat Idle

A First Solar Inc. shareholder has filed a derivative suit, alleging that the company's directors and officers misled investors about the impact of U.S. tariffs on its operations while downplaying risks and overstating mitigation efforts. The complaint, filed July 28, 2026, names CEO Mark R. Widmar, CFO Alexander R. Bradley, and nine other individual defendants, including non-executive Chairman Michael J. Ahearn and directors Lisa A. Kro, William J. Post, Venkata "Murthy" Renduchintala, Paul H. Stebbins, Michael T. Sweeney, and Norman L. Wright.

Tariffs and Misleading Statements

The complaint centers on a series of public statements made by First Solar's leadership that allegedly painted an overly optimistic picture of the company's ability to navigate the tariff landscape. On April 29, 2025, during the company's first-quarter earnings call, Widmar stated, "We believe on balance, the political and trade environment continues to be an overall long-term favorable from a First Solar perspective" (Compl. ¶4). This sentiment was echoed on July 31, 2025, during the second-quarter earnings call, when Widmar claimed that "the recent policy and trade developments have, on balance, strengthen[ed] First Solar's relative position" (Compl. ¶91). However, the complaint alleges that these statements were materially misleading, as they failed to disclose the significant challenges posed by the tariffs, including the uneconomical nature of shipping products with high tariffs into the U.S.

On October 30, 2025, during the third-quarter earnings call, Widmar acknowledged that "it becomes uneconomical to ship a product with a 46% tariff into the U.S.," directly contradicting his earlier optimistic statements (Compl. ¶90). The complaint alleges that this shift in tone underscores the misleading nature of the earlier remarks. The complaint further alleges that the defendants violated First Solar’s Code of Conduct, which states, "Relentless integrity is expected of everyone, and our Code applies to everyone, from members of the Board of Directors to our Officers, Associates and our valued partners" (Compl. ¶58). The Code of Conduct also stipulates, "Failure to comply with our Code, our policies and the law may result in discipline, including dismissal" (Compl. ¶59). Additionally, the Code of Conduct mandates, "We never conceal, alter, damage or destroy any company record, and we follow instructions from the Legal Department to maintain and preserve records in the event of investigation or litigation" (Compl. ¶61).

Proxy Statement Omissions and Violations

The complaint alleges that First Solar's April 4, 2025, proxy statement contained material misstatements and omissions regarding the impact of tariffs on the company's operations. The proxy statement allegedly overstated the company's mitigation efforts, such as idling production in Southeast Asia and building a new U.S. facility, while downplaying the risks associated with these strategies. On February 24, 2026, First Solar revealed that its Southeast Asia factories were operating at only 20% utilization due to tariff exposure (Compl. ¶7, ¶111). The complaint alleges that the 2025 Proxy Statement falsely claimed adherence to the Code of Conduct and adequate risk oversight by the Board and its committees (Compl. ¶82). The complaint states that shareholders re-elected the defendant directors, ratified PriceWaterhouseCoopers LLP as the independent auditor, and approved executive compensation based on the false and misleading proxy statement (Compl. ¶83). The complaint further alleges that Defendant Bradley misrepresented the company’s oversold position through 2026, stating, "we remain cumulatively oversold through 2026," while omitting under-allocation in Malaysia and Vietnam due to contract terminations and delivery shifts (Compl. ¶74). Bradley also falsely assured that "our module sale contracts for international product deliveries typically have some form of tariff protection" (Compl. ¶75).

Financial Guidance and Economic Projections

The complaint alleges that First Solar's misleading statements and omissions had a significant impact on the company's financial guidance and stock price. On February 24, 2026, First Solar issued its fiscal year 2025 earnings release, reporting disappointing financial results and lowering its 2026 revenue guidance to a range of $4.2 billion to $5.2 billion, down from the $6.16 billion consensus estimate (Compl. ¶6, ¶108). The company also provided net sales guidance for 2026 in the range of $4.9 billion to $5.2 billion, with a gross margin expected to be between $2.5 billion and $2.6 billion, or 49.5% (Compl. ¶109). First Solar also projected that it would receive Section 45X tax credits totaling between $2.1 billion and $2.19 billion for 2026 (Compl. ¶109). However, the complaint alleges that these projections were based on overly optimistic assumptions about the company's ability to mitigate tariff impacts. For example, the company's guidance assumed that its India facility would operate at full capacity, despite a 26% reciprocal tariff rate imposed by India (Compl. ¶89, ¶110). On February 24, 2026, First Solar's stock price fell $33.09 per share (13.6%), from $243.21 to $210.12 (Compl. ¶8, ¶112).

In a February 23, 2026, press release, First Solar projected that its operations would contribute $7.8 billion annually to the U.S. GDP by 2027, supporting nearly 40,000 American jobs (Compl. ¶104). The press release also projected a $5.8 billion annual contribution to U.S. GDP in 2025, with a projected increase of 10,000 supported jobs from 2025 to 2027 (Compl. ¶105). The complaint alleges that these projections were materially false and misleading, as they understated the impact of tariffs and overstated the company's mitigation efforts (Compl. ¶104–106). The press release failed to disclose the understated tariff impact and overstated mitigation efforts, such as the benefits of the new U.S. facility and the underutilization of the Vietnam and Malaysia facilities (Compl. ¶107). The complaint states, "the impact the newly imposed tariffs would have on the Company was understated" (Compl. ¶148).

Earlier in the year, on January 7, 2026, First Solar's stock had already taken a hit when Jeffries downgraded the company from Buy to Hold, causing the stock price to drop from $266.78 on January 6, 2026, to $241.10 on January 7, 2026, a decline of $27.67 per share, or 10.3% (Compl. ¶103). The complaint alleges that this downgrade was due to lowered guidance, de-bookings, margin compression, and underutilization of international facilities (Compl. ¶102).

New U.S. Facility and Corporate Expenditures

In response to the tariffs, First Solar announced on November 14, 2025, that it had selected South Carolina for a new U.S. production facility with a planned capacity of 3.7 gigawatts (Compl. ¶96, ¶97). The company projected total program direct spend for the new facility to be $330 million, including $260 million in capital expenditures (Compl. ¶97). The complaint alleges that the company also incurred $70 million in non-capitalized expenses, including deinstallation, shipping, tariffs, and reinstallation costs (Compl. ¶97). Additionally, First Solar projected incremental capital expenditures of $26 million in 2025 for the new facility, along with $2 million in production start-up expenses and $10 million in incremental indirect charges, such as severance and asset impairment (Compl. ¶97).

The complaint alleges that these expenditures were part of a broader scheme to overstate the company's mitigation efforts while understating the financial impact of the tariffs. For example, the complaint alleges that First Solar terminated bookings for 6.6 gigawatts under multiyear agreements with BP, at a base average selling price of $0.294 per watt (Compl. ¶95). The complaint further alleges that Defendant Widmar misrepresented the company's ability to utilize its international production capacity, stating, "we may not be in a position to utilize our currently available international production capacity" (Compl. ¶86). The complaint also alleges that Widmar claimed that "any future domestic capacity expansion would be unencumbered by the prospects of FEOC legislation" (Compl. ¶88).

Insider Sales and Unjust Enrichment

The complaint further alleges that certain defendants engaged in insider sales while the company's stock was allegedly inflated by false and misleading statements. Director Paul H. Stebbins sold 7,000 shares of First Solar stock for approximately $1,836,804 on November 7, 2025. The sales included:

• 1,423 shares at $261.27 per share, for proceeds of $371,787;
• 4,656 shares at $262.59 per share, for proceeds of $1,222,619; and
• 921 shares at $263.19 per share, for proceeds of $242,398 (Compl. ¶35).

The complaint alleges that Stebbins engaged in improper insider sales while the stock price was artificially inflated due to misleading statements (Compl. ¶132, ¶161). The complaint further alleges that the defendants received unjust enrichment through bonuses, stock options, or similar compensation tied to the artificially inflated valuation of First Solar (Compl. ¶167).

Breach of Fiduciary Duty and Corporate Governance Failures

The complaint alleges that the individual defendants breached their fiduciary duties to First Solar and its shareholders by failing to oversee the company's response to the tariff challenges adequately. The complaint also alleges that the defendants violated First Solar's Code of Conduct, which states, "It violates the law and our policy to trade on such information, so we never buy or sell stock based on material, non-public we have learned at First Solar" (Compl. ¶62).

The complaint alleges that the defendants' actions caused First Solar to lose millions of dollars, incur legal liability, and suffer reputational harm, resulting in a "liar's discount" on its stock price (Compl. ¶113, ¶118). The complaint states, "waste valuable corporate assets, to incur many millions of dollars of legal liability and/or costs" (Compl. ¶181). The complaint also alleges that the defendants' conduct was based on bad faith, intentional, reckless, or disloyal misconduct, and that the director defendants cannot claim exculpation (Compl. ¶139).

Demand Futility and Board Composition

The complaint states that a demand on the First Solar board to take action would be futile, as several directors face a substantial likelihood of liability for their roles in the alleged scheme. The complaint states that the director defendants are unable to impartially investigate the allegations due to their involvement in the scheme (Compl. ¶123–124).

The complaint provides a detailed breakdown of each director's alleged role in the scheme:

• Mark R. Widmar (CEO and director): Allegedly made false statements, solicited the misleading 2025 proxy statement, and breached his fiduciary duties (Compl. ¶126). The complaint states that Widmar claimed, "The passage of the One Big Beautiful Bill Act and the Administration’s trade policies boosted demand for American energy technology" (Compl. ¶100).
• Michael J. Ahearn (non-executive Chairman, former CEO, director): Allegedly breached fiduciary duties and solicited the misleading 2025 proxy statement (Compl. ¶127).
• Anita Marangoly George (director, Technology Committee member): Allegedly breached fiduciary duties and solicited the misleading 2025 proxy statement (Compl. ¶128).
• Lisa A. Kro (director since 2022; Chair, Audit Committee): Allegedly conducted little oversight of the scheme, disregarded her duties, and "consciously disregarded her duty to monitor such controls over reporting and engagement in the scheme" (Compl. ¶129).
• William J. Post (director since 2010; Lead Independent Director): Allegedly conducted little oversight, disregarded his duties, and solicited the misleading 2025 proxy statement (Compl. ¶130).
• Venkata "Murthy" Renduchintala (director since 2024; Chair, Technology Committee): Allegedly conducted little oversight, disregarded his duties, and solicited the misleading 2025 proxy statement (Compl. ¶131).
• Paul H. Stebbins (director since 2006; Chair, Nominating and Governance Committee): Allegedly conducted little oversight, disregarded his duties, solicited the misleading 2025 proxy statement, and engaged in insider sales while the stock price was artificially inflated (Compl. ¶132).
• Michael T. Sweeney (director since 2003; Chair, Compensation Committee): Allegedly conducted little oversight, disregarded his duties, solicited the misleading 2025 proxy statement, and engaged in insider sales while the stock price was artificially inflated (Compl. ¶133).
• Norman L. Wright (director since 2022; member, Compensation Committee): Allegedly conducted little oversight, disregarded his duties, and solicited the misleading 2025 proxy statement (Compl. ¶134).

The complaint alleges that the director defendants permitted false and misleading statements and failed to act with integrity, engaging in or permitting the scheme to cause the company to issue materially false and misleading statements, stating, "engaged in or permitted the scheme to cause the Company to issue materially false and misleading statements" (Compl. ¶137). The complaint also contends that the defendants failed to file lawsuits to recover damages for First Solar from the alleged wrongdoing (Compl. ¶138).

D&O Insurance and Exculpation

The complaint addresses the potential role of directors and officers (D&O) insurance in the case, noting that while the director defendants may be protected by such insurance, an "insured-versus-insured exclusion" would eliminate coverage for direct suits by the company (Compl. ¶141). The complaint further alleges that if no D&O insurance is available, the director defendants will not sue due to uninsured individual liability (Compl. ¶142).

The complaint argues that the defendants' conduct was based on bad faith, intentional, reckless, or disloyal misconduct, and that the director defendants cannot claim exculpation (Compl. ¶139). The complaint alleges that the 2025 Proxy Statement failed to disclose the individual defendants' violations of the Code of Conduct and the inadequate risk oversight by the Board (Compl. ¶147). The complaint further alleges that the proxy statement understated the impact of the tariffs and overstated the company's mitigation efforts, such as the new U.S. facility and the underutilization of its Vietnam and Malaysia facilities (Compl. ¶148). The complaint states, "the statements contained in the 2025 Proxy Statement were materially false and misleading" (Compl. ¶149).

Related Proceedings and Shareholder Derivative Claims

The complaint references a related federal securities fraud class action, In re First Solar, Inc. Securities Litigation, which alleges violations of Sections 10(b) and 20(a) of the Exchange Act (Compl. ¶12, ¶185). The class action names First Solar, Inc., Mark R. Widmar, and Alexander R. Bradley as defendants. The complaint also notes that First Solar conducted internal investigations into the alleged misconduct (Compl. ¶12).

The complaint asserts seven counts against the individual defendants, including shareholder derivative claims:

1. Breach of fiduciary duty (all individual defendants) (Compl. ¶42–52);
2. Unjust enrichment (all individual defendants);
3. Abuse of control (all individual defendants);
4. Gross mismanagement (all individual defendants);
5. Waste of corporate assets (all individual defendants);
6. Violation of Section 14(a) of the Securities Exchange Act of 1934 (15 U.S.C. § 78n(a)) and Rule 14a-9 (17 C.F.R. § 240.14a-9) (all individual defendants); and
7. Contribution under Sections 10(b) and 21D of the Exchange Act (15 U.S.C. § 78j(b), 15 U.S.C. § 78u-4(f)) (defendants Widmar and Bradley).

The plaintiff seeks relief to remedy the alleged breaches of fiduciary duty, corporate governance failures, and securities law violations. The complaint also alleges that the defendants' conduct caused the company to "waste valuable corporate assets, to incur many millions of dollars of legal liability and/or costs" (Compl. ¶181).

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.