A federal judge in Texas has dismissed a long-running lawsuit against MBTA general manager Luis Ramirez dating to his work at a former employer, saying he and other executives did not mislead investors about the company’s worsening financial condition.
This is the second dismissal of a lawsuit against Ramirez and his former company, then known as Global Power Equipment Group. The Texas energy firm saw its stock fall precipitously in 2015, after acknowledging it had misreported years of financial statements, overstating income by tens of millions of dollars.
Investors had accused Ramirez, who was chief executive of Global Power from 2012 to 2015, and other company executives of fraud in a class action lawsuit, arguing they filed statements despite being aware of financial issues. But US District Court Judge Barbara Lynn, who dismissed one version of the complaint last year, tossed the latest lawsuit about two weeks ago.
The judge concluded that even if Ramirez and former chief financial officer Raymond Guba had known of accounting problems at one Global Power division, as the lawsuit alleges, it was such a small portion of the company’s overall problems that misstating information about them would not have been enough to influence investors.
“No reasonable investor would consider such information important in making a decision to invest,” she wrote.
Lynn also noted that Global Power had other, more substantial problems, but the lawsuit “does not attempt to connect either Ramirez or Guba to knowledge of the other, larger accounting errors.”
The investor group is appealing the ruling. Global Power has since renamed itself Williams Industrial Services Group Inc.
Ramirez became the MBTA’s general manager last September, despite having no history in public transit. The Baker administration instead said he was chosen for his executive experience working with heavy infrastructure; prior to his job at Global Power, he worked at General Electric and Siemens.
Ramirez has previously said executives he hired at Global Power helped uncover the widespread accounting issues, some of which predated his tenure.
The T declined to comment on the lawsuit, saying it is not related to Ramirez’s time at the agency. His lawyers did not respond to requests for comment.Adam Vaccaro can be reached at firstname.lastname@example.org. Follow him on Twitter at @adamtvaccaro.