The legal action, filed by Pomerantz LLP, centers on a 10-year agreement Flotek announced in August 2026 to support a 400 MW natural gas project for the Puerto Rico Electric Power Authority. While Flotek initially touted the deal as a $400 million revenue backlog, a subsequent report from Wolfpack Research alleged the contract was compromised by unauthorized signatures and regulatory intervention. The research firm claimed Flotek replaced the original contractor, Enchanted Rock, LLC, without the requisite technical or financial authorization, prompting a federal referral for criminal prosecution.
Market reaction to the disclosures was swift. Flotek shares plummeted 20% on August 17, 2026, following the release of the report, and dropped another 5.7% the following day after the Financial Oversight and Management Board for Puerto Rico directed PREPA to terminate the project. Although Flotek maintains it has not received formal termination notice, the firm remains under scrutiny for potential securities violations. Investors who acquired Flotek securities during the specified class period have until October 26, 2026, to petition the court for lead plaintiff status.
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