(Against All Defendants For Violations of   Section 10(b) And Rule 10b-5 Promulgated Thereunder)   (Violations of Section 20(a) of the  Exchange Act Against The Individual Defendants)   20.  On December 23, 2011, Defendant Vieau issued a statement concerning a battery  recall involving the Fisker Karma, after determining that some of the battery packs it produced  for Fisker “could have a potential safety issue relating to the battery cooling system.” Viaeau  further stated:  Specifically, certain hose clamps that are part of the battery pack’s internal  cooling system were misaligned, positioned in such a way that could potentially  cause a coolant leak.  Over time, it is possible that in certain rare circumstances,  this coolant leak could potentially lead to an electrical short circuit.   21.  On December 29, 2011, Fisker recalled 239 Karma cars manufactured from July  1, 2011 through November 3, 2011, advising that certain clamps may have been positioned  incorrectly during assembly with the high-voltage battery.   22.  On March 8, 2012, Consumer Reports reported that while conducting  speedometer calibration runs on its test track with a Fisker Karma, the car’s “dashboard flashed a  message and sounded a ‘bing’ showing a major fault.”     Materially False and Misleading   Statements Issued During the Class Period   24.  On March 11, 2011, the Company filed an annual report for the period ended  December 31, 2010 on Form 10-K with the SEC, which was signed by, among others,  Defendants Vieau and Granara and reiterated the Company’s previously announced annual  financial results and financial position.  In addition, the Form 10-K contained signed  certifications pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) by Defendant Vieau and  Granara, stating that the financial information contained in the Form 10-K was accurate and that  they disclosed any material changes to the Company’s internal control over financial reporting.   26.  On April 1, 2011, the Company announced the pricing of an offering of 18  million shares of common stock at a price of $6.00 per share and an offering of $125,000,000  principal amount of convertible subordinated notes due 2016.  The net proceeds from the sale of  the common stock and the convertible notes were estimated to be approximately $102.7 million  and $120.6 million, respectively.   27.  On May 9, 2011, the Company issued a press release announcing its financial  results for the first quarter ended March 31, 2011.  For the quarter, the Company reported a net  loss of $54 million, or $0.51 diluted LPS and revenue of $18 million, as compared to a net loss  of $29 million, or $0.28 diluted LPS and revenue of $24 million for the same period a year ago.   28.  On May 10, 2011, the Company filed a quarterly report for the period ended  March 31, 2011 on Form 10-Q with the SEC, which was signed by Defendants Vieau and  Granara and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications by Defendants  Vieau and Granara, stating that the financial information contained in the Form 10-Q was  accurate and that they disclosed any material changes to the Company’s internal control over  financial reporting.    30.  On August 5, 2011, the Company filed a quarterly report for the period ended  June 30, 2011 on Form 10-Q with the SEC, which was signed by Defendants Vieau and Prystash  and reiterated the Company’s previously announced financial results and financial position.  In  addition, the Form 10-Q contained signed certifications by Defendants Vieau and Prystash,  stating that the financial information contained in the Form 10-Q was accurate and that they  disclosed any material changes to the Company’s internal control over financial reporting.   31.  On November 9, 2011, the Company issued a press release announcing its  financial results for the third quarter ended September 30, 2011.  For the quarter, the Company  reported a net loss of $64 million, or $0.51 diluted LPS and revenue of $64 million, as compared  to a net loss of $44 million, or $0.42 diluted LPS and revenue of $26 million for the same period  a year ago.   32.  On November 9, 2011, the Company filed a quarterly report for the period ended  September 30, 2011 on Form 10-Q with the SEC, which was signed by Defendants Vieau and  Prystash and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications by Defendants  Vieau and Prystash, stating that the financial information contained in the Form 10-Q was  accurate and that they disclosed any material changes to the Company’s internal control over  financial reporting.   34.  On March 12, 2012, the Company filed an annual report for the period ended  December 31, 2011 on Form 10-K with the SEC, which was signed by, among others,  Defendants Vieau and Prystash and reiterated the Company’s previously announced annual  financial results and financial position.  In addition, the Form 10-K contained signed  certifications pursuant to SOX by Defendant Vieau and Prystash, stating that the financial  information contained in the Form 10-K was accurate and that they disclosed any material  changes to the Company’s internal control over financial reporting.   36.  The statements referenced in ¶¶ 23-25; 27-35 above were materially false and/or  misleading because they misrepresented and failed to disclose the following adverse facts, which  were known to defendants or recklessly disregarded by them that: (1) the Company had severe  manufacturing deficiencies at its Livonia, Michigan manufacturing facility, which produced  defective prismatic cells that resulted in premature failure of battery modules and packs; (2) as a  result of the defective prismatic cells, A123 would likely be required to recall and replace the  affected modules and packs and incur substantial costs in doing so, threatening the financial  viability of the Company; and (3) as a result of the foregoing, the Company’s statements were  materially false and misleading at all relevant times.  43.  Plaintiff brings this action as a class action pursuant to Federal Rule of Civil  Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or  otherwise acquired A123 securities during the Class Period (the “Class”); and were damaged  thereby.  Excluded from the Class are defendants herein, the officers and directors of the  Company, at all relevant times, members of their immediate families and their legal  representatives, heirs, successors or assigns and any entity in which defendants have or had a  controlling interest.   44.  The members of the Class are so numerous that joinder of all members is  impracticable.  Throughout the Class Period, A123 securities were actively traded on the  NASDAQ.  While the exact number of Class members is unknown to Plaintiff at this time and  can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds  or thousands of members in the proposed Class.  Record owners and other members of the Class  may be identified from records maintained by A123 or its transfer agent and may be notified of  the pendency of this action by mail, using the form of notice similar to that customarily used in  securities class actions.   46.  Plaintiff will fairly and adequately protect the interests of the members of the  Class and has retained counsel competent and experienced in class and securities litigation.   Plaintiff has no interests antagonistic to or in conflict with those of the Class.   47.  Common questions of law and fact exist as to all members of the Class and  predominate over any questions solely affecting individual members of the Class.  Among the  questions of law and fact common to the Class are:  � whether the federal securities laws were violated by defendants’ acts as  alleged herein;  � whether statements made by defendants to the investing public during the  Class Period misrepresented material facts about the business, operations and  management of A123;  � whether the Individual Defendants caused A123 to issue false and misleading  financial statements during the Class Period;  � whether defendants acted knowingly or recklessly in issuing false and  misleading financial statements;  � whether the prices of A123 securities during the Class Period were artificially  inflated because of the defendants’ conduct complained of herein; and  � whether the members of the Class have sustained damages and, if so, what is  the proper measure of damages.   48.  A class action is superior to all other available methods for the fair and efficient  adjudication of this controversy since joinder of all members is impracticable.  Furthermore, as  the damages suffered by individual Class members may be relatively small, the expense and  burden of individual litigation make it impossible for members of the Class to individually  redress the wrongs done to them.  There will be no difficulty in the management of this action as  a class action.   50.  Based upon the foregoing, Plaintiff and the members of the Class are entitled to a  presumption of reliance upon the integrity of the market.   51.  Plaintiff repeats and realleges each and every allegation contained above as if  fully set forth herein.   52.  This Count is asserted against defendants and is based upon Section 10(b) of the  Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.   54.  Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the  defendants participated directly or indirectly in the preparation and/or issuance of the quarterly  and annual reports, SEC filings, press releases and other statements and documents described  above, including statements made to securities analysts and the media that were designed to  influence the market for A123 securities.  Such reports, filings, releases and statements were  materially false and misleading in that they failed to disclose material adverse information and  misrepresented the truth about A123’s operations and business prospects.   56.  Defendants were personally motivated to make false statements and omit material  information necessary to make the statements not misleading in order to personally benefit from  the sale of A123 securities from their personal portfolios.   57.  Information showing that defendants acted knowingly or with reckless disregard  for the truth is peculiarly within defendants’ knowledge and control.  As the senior managers  and/or directors of A123, the Individual Defendants had knowledge of the details of A123  internal affairs.   58.  The Individual Defendants are liable both directly and indirectly for the wrongs  complained of herein.  Because of their positions of control and authority, the Individual  Defendants were able to and did, directly or indirectly, control the content of the statements of  A123.  As officers and/or directors of a publicly-held company, the Individual Defendants had a  duty to disseminate timely, accurate, and truthful information with respect to A123’s businesses,  operations, future financial condition and future prospects.  As a result of the dissemination of  the aforementioned false and misleading reports, releases and public statements, the market price  of A123 securities was artificially inflated throughout the Class Period.  In ignorance of the  adverse facts concerning A123’s business and financial condition which were concealed by  defendants, Plaintiff and the other members of the Class purchased A123 securities at artificially  inflated prices and relied upon the price of the securities, the integrity of the market for the  securities and/or upon statements disseminated by defendants, and were damaged thereby.   60.  By reason of the conduct alleged herein, defendants knowingly or recklessly,  directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5  promulgated thereunder.   61.  As a direct and proximate result of defendants’ wrongful conduct, Plaintiff and  the other members of the Class suffered damages in connection with their respective purchases  and sales of the Company’s securities during the Class Period, upon the disclosure that the  Company had been disseminating misrepresented financial statements to the investing public.  62.  Plaintiff repeats and realleges each and every allegation contained in the  foregoing paragraphs as if fully set forth herein.   64.  As officers and/or directors of a publicly owned company, the Individual  Defendants had a duty to disseminate accurate and truthful information with respect to A123’s  operations, and to correct promptly any public statements issued by A123 which had become  materially false or misleading.   65.  Because of their positions of control and authority as senior officers, the  Individual Defendants were able to, and did, control the contents of the various reports, press  releases and public filings which A123 disseminated in the marketplace during the Class Period  concerning A123’s results of operations.  Throughout the Class Period, the Individual  Defendants exercised their power and authority to cause A123 to engage in the wrongful acts  complained of herein. The Individual Defendants therefore, were “controlling persons” of A123  within the meaning of Section 20(a) of the Exchange Act.  In this capacity, they participated in  the unlawful conduct alleged which artificially inflated the market price of A123 securities.   66.  Each of the Individual Defendants, therefore, acted as a controlling person of  A123.  By reason of their senior management positions and/or being directors of A123, each of  the Individual Defendants had the power to direct the actions of, and exercised the same to cause,  A123 to engage in the unlawful acts and conduct complained of herein.  Each of the Individual  Defendants exercised control over the general operations of A123 and possessed the power to  control the specific activities which comprise the primary violations about which Plaintiff and  the other members of the Class complain.   Background  