Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—M.D.N.C.: Lead plaintiff named in Net Power securities class action, (Apr 28, 2026)

By Rodney F. Tonkovic, J.D.

The complaint alleges that the company misled investors about a clean power project's date of completion and cost.

A lead plaintiff and counsel were appointed in a putative securities class action against Net Power Inc. The complaint alleges that the energy company made false statements about its business projections and financials that led to a decline in its stock price. Walter Schroeder was appointed lead plaintiff, and Glancy Prongay Wolke & Rotter LLP was appointed lead counsel (Luciani v. Net Power Inc., No. 1:25-cv-296 (M.D.N.C. Apr. 23, 2026)).

Project Permian. Defendant Net Power Inc. is an NYSE-traded company focusing on clean energy. In 2023, Net Power represented that an electrical plant in the Permian Basin of West Texas would be operational in 2026 at a cost of $950 million. Later in 2023, however, the defendants announced that the project would not be completed on schedule and that costs were being pushed up by various issues; share prices fell almost 20% upon this announcement. In 2025, Net Power announced that the project would not be completed before 2029 and that it would cost nearly $2 billion; in response, share prices dropped 31.46%.

The lawsuit. The plaintiff filed a class action April 2025, alleging violations of the antifraud provisions of the Exchange Act based on the defendants' alleged failure to disclose material risks and capital needs for the project. The complaint alleged that the defendants were aware of their omissions and were motivated to defraud investors because of the project's influence on Net Power's stock price.

Lead plaintiff. David A. Wenn and Ted Luciani (as co-lead plaintiffs) and Walter Schroeder filed competing motions to be appointed lead plaintiffs in this lawsuit. The court concluded that Schroeder was the presumptive lead plaintiff. The court first found that Schroeder had the largest financial interest, claiming a loss of $279,357, while Wenn and Luciani claimed $64,581. The court declined to include losses Schroeder incurred in an account held in the name of a trust, but, even so, his losses were still around four times greater than those of Wenn and Luciani.

Schroeder also met the typicality and adequacy requirements of Rule 23. The court said that Schroeder traded in both common stock and options, but his options-related losses were a relatively small portion of his total losses. He also relied on the defendants' misstatements and omissions when trading Net Power securities, and alleged that he suffered financial harm. His interest in the litigation was also aligned with the proposed class.

Wenn and Luciani were unable to rebut Schroeder's presumptive lead plaintiff status. According to the court, they were unable to show that Schroeder would be subject to unique defenses because he was not, as claimed, a day trader. Instead, he used a sophisticated trading strategy that staggered common stock purchases throughout the class period, while simultaneously intermittently trading options.

The court also rejected the argument that Schroeder could not adequately represent the class because he had been a defendant in a securities class action approximately twenty years ago. That dispute was privately settled, and Schroeder was neither found guilty of any bad act nor publicly sanctioned, the court said.

The case is No. 1:25-cv-296.

Judge: Freeman, L.

Attorneys: David Garrett Schiller (Schiller & Schiller, PLLC) for Ted Luciani. Christopher George Smith (Smith Anderson) for Net Power Inc., Daniel J. Rice, IV, Akash Patel and Brian Allen.

Companies: Net Power Inc.

LitigationEnforcement: FraudManipulation GCNNews NorthCarolinaNews