EU Lawsuit Alert! Class Action Lawsuit Against enCore Energy Corp.

A class action lawsuit was filed against enCore Energy Corp. (EU) by Levi & Korsinsky on March 14, 2025. The plaintiffs (shareholders) alleged that they bought EU stock at artificially inflated prices between March 28, 2024 and March 2, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought enCore Energy stock during that period can click here to learn about joining the lawsuit.

enCore Energy says it is driving the clean energy transition in the U.S. by providing clean, reliable, and affordable fuel for generating carbon-free nuclear energy. enCore claims to be the only U.S. uranium company with multiple Central Processing Plants (CPP) in operation, using proven In-Situ Recovery (ISR) technology.

The company’s inadequate internal controls over financial reporting are at the heart of the current complaint.

enCore Energy’s Misleading Claims

According to the lawsuit, enCore Energy and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the efficacy of the Company’s internal controls over financial reporting, and ancillary issues, from SEC filings and related material.

For instance, during the Class Period, the company mentioned that, upon evaluating the effectiveness of the design and operation of its disclosure controls and procedures, the CEO and CFO found that, as of December 31, 2023, the company’s disclosure controls and procedures were effective.

Additionally, the assessment of the effectiveness of the company’s internal control over financial reporting as of December 31, 2023, were found to be effective. The management further concluded that there were no material weaknesses in the company’s internal control over financial reporting.

Notably, on November 27, enCore announced that, effective January 1, 2025, it would change its reporting status with the SEC from a foreign filer to a U.S. domestic filer. Accordingly, enCore will begin reporting its financial reports under the U.S. GAAP.

enCore also appointed KPMG LLP as its new auditor and confirmed that there were no reservations in the prior audit reports of its previous auditor, for the two most recently completed financial years or for any subsequent period until its resignation date.

However, subsequent events (discussed below) revealed that enCore Energy misled investors about the effectiveness of its financial reporting standards, leading to increased losses for the company.

Plaintiffs’ Arguments

The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about some of the company’s cost capitalization practices under U.S. GAAP accounting.

The information became clear before the markets opened on March 3, 2025, when enCore Energy published its fiscal fourth-quarter results. Unfortunately, the company reported a net loss of $61.39 million for FY24, significantly higher (more than double) than its net loss of $25.6 million posted in FY23.

enCore attributed the wider-than-expected loss to its inability to capitalize certain exploratory and development costs under U.S. GAAP. These same costs would have been capitalized under IFRS (International Financial Reporting Standards). Following the news, EU stock plunged 46.4% on the same day, causing massive damage to shareholder returns.

To conclude, the defendants allegedly misled investors about the company’s inadequate internal controls and procedures, which allegedly impacted enCore’s bottom line. Owing to these challenges, EU stock has lost 50.2% so far this year.