Evoqua Fair Fund Distribution Agent Announces Notice of Distribution Plan

CHANHASSEN, Minn., Dec. 16, 2024 /PRNewswire/ --

UNITED STATES DISTRICT COURT 
DISTRICT OF RHODE ISLAND

If you purchased or acquired Evoqua Water Technologies Corp. ("Evoqua") common stock, traded under the symbol AQUA (the "Security") during the period November 1, 2017 through October 29, 2018, inclusive (the "Recovery Period"), you may be eligible to recover from the Evoqua Water Technologies Corp. Fair Fund (the "Evoqua Fair Fund"). You must submit a completed Proof of Claim Form with the necessary documentation so that it is postmarked or, if not sent by U.S. Mail, received by MARCH 9, 2024 (the "Claims Bar Date") to be eligible to recover from the Fair Fund.

PLEASE READ THE PLAN NOTICE CAREFULLY AND IN ITS ENTIRETY.  IF YOU TIMELY SUBMIT A CLAIM FORM AND YOU SATISFY THE ELIGIBILITY CRITERIA UNDER THE DISTRIBUTION PLAN APPROVED BY THE COMMISSION, YOU MAY BE ELIGIBLE FOR A DISTRIBUTION PAYMENT FROM THE EVOQUA FAIR FUND. THE PLAN NOTICE CONTAINS IMPORTANT INFORMATION REGARDING THE EVOQUA FAIR FUND, THE PLAN, AND ELIGIBILITY UNDER THE PLAN.

Background

On March 13, 2023, the SEC filed its complaint against Evoqua and Imran Parekh ("Parekh") (collectively, "Defendants").  According to the Complaint, from at least the fourth quarter of 2016 through August 2018, Parekh, as the Finance Director of one of Evoqua's divisions, engaged in fraudulent accounting practices that resulted in Evoqua improperly reporting materially false revenue amounts in its financial statements filed with the Commission.  The SEC's complaint alleged that Parekh inflated the revenue Evoqua reported quarterly and at year-end by counting revenue from sales much earlier than accounting principles permitted.  The complaint alleged that Parekh improperly accounted for so-called "bill-and-hold" transactions, for which Evoqua recognized revenue from the sale of filtration products earlier than permitted and without meeting the criteria found in accounting principles to be able to immediately recognize the revenue.

The Complaint further alleged that negligent conduct at Evoqua's corporate level in managing the financial reporting and accounting controls processes facilitated Parekh's improper accounting practices.  As a result of the fraudulent scheme, the Complaint alleges, Evoqua improperly reported nearly $12 million of additional expected revenue for its fiscal year 2017 in its registration statement and its initial public offering prospectus filed with the Commission; that the misconduct continued through Evoqua's first year as a public company, resulting in inaccurate books and records and material misstatements of Evoqua's financial condition in subsequent filings with the Commission; and that by failing to disclose to investors or in filings with the Commission that Evoqua reported uncompleted sales as revenue by misapplying bill-and-hold accounting criteria, Evoqua misled investors and potential investors about the true financial picture of the company.

To date, the Defendants have paid a total of $8,546,831.00, and any additional funds collected from the Defendants pursuant to the Final Judgments will be added to the Fair Fund.  The Fair Fund has been deposited in an SEC-designated account at the United States Department of the Treasury, and any accrued interest will be added to the Fair Fund.

On May 20, 2024, the Court established a Fair Fund so that the penalties, disgorgement, and prejudgment interest collected can be distributed to harmed investors.  On the same day, the Court appointed Miller Kaplan Arase LLP as Tax Administrator for the Fair Fund ("Tax Administrator").

On June 25, 2024, the Court appointed Analytics Consulting LLP as Distribution Agent for the Fair Fund ("Distribution Agent") and authorized the payment of fees and expenses of the Distribution Agent without further Court order.

On October 25, 2024, the Court entered an order approving the Distribution Plan.

Who is Potentially Eligible for Compensation?

If you purchased Evoqua common stock during the period November 1, 2017 through October 29, 2018, inclusive; are not an Excluded Party as defined in the Plan; and suffered a loss according to the Plan; you may be eligible for a Distribution Payment from the Evoqua Fair Fund. Distribution Payments will be subject to a $20.00 Minimum Distribution Amount.

Excluded Parties are defined as: a) the Defendants; b) present or former officers or directors of Defendants or any assigns, creditors, heirs, distributees, spouses, parents, children, or controlled entities of any of the foregoing Persons or entities; c) any employee or former employee of the Defendants or any of its affiliates who has been terminated for cause or has otherwise resigned, in connection with the conduct alleged in the Complaint; d) any Person who, as of the Claims Bar Date, has been the subject of criminal charges related to the conduct alleged in the Complaint or any related Commission action; e) any firm, trust, corporation, officer, or other entity in which Defendants has or had a controlling interest; f) the Distribution Agent, its employees, and those Persons assisting the Distribution Agent in its role as the Distribution Agent; or g) any purchaser or assignee of another Person's right to obtain a recovery from the Fair Fund for value; provided, however, that this provision will not be construed to exclude those Persons who obtained such a right by gift, inheritance, or devise.

How to Make a Claim

You must complete and sign the Claim Form and submit it to Distribution Agent so that it is postmarked or, if not sent by U.S. Mail, received no later than MARCH 9, 2024.

The Claim Form can be downloaded at www.EvoquaFairFund.com. If you have any questions or would like the Court-appointed Distribution Agent to send you a Claim Form, call 1-888-776-1641 or email [email protected].

You can file a Claim Form by mailing the completed form to:

Evoqua Fair Fund
c/o Analytics Consulting LLC
Distribution Agent
P.O. Box 2007
Chanhassen, MN 55317-2007

If you do not complete and timely submit a Claim Form, you will not be considered for eligibility to receive a Distribution Payment under the Plan.

Obtaining a Plan of Distribution and Additional Information

You can get a copy of the Plan and additional information concerning the Evoqua Fair Fund at www.EvoquaFairFund.com. You can also obtain a copy of the Plan by emailing the Distribution Agent at [email protected], calling the Distribution Agent at 1-888-776-1641, or writing to Evoqua Fair Fund, c/o Analytics Consulting LLC, Distribution Agent, P.O. Box 2007, Chanhassen, MN 55317-2007.

SOURCE Analytics Consulting, LLC