Power Solutions International, Inc. Securities Fraud Investigation

Peiffer Wolf is investigating Power Solutions International, Inc. (NASDAQ: PSIX) for potential violations of SEC Rule 10b-5 and related federal securities laws in connection with alleged material misrepresentations about the company’s data center market strategy, manufacturing capabilities, and financial performance.

Power Solutions International, Inc. is a Wood Dale, Illinois-based designer, manufacturer, and seller of engines and power systems. A recent federal court complaint claims the company violated SEC Rule 10b-5 by omitting facts and issuing misleading statements to investors.

If you invested in Power Solutions International securities between May 8, 2025 and March 2, 2026 (the “Class Period”) and suffered losses, Contact Us as soon as possible for a Free Case Evaluation.

Important: The deadline to seek lead plaintiff status in this lawsuit is on or about May 19, 2026.

Power Solutions International Stock | What Happened

According to a Complaint filed on March 20, 2026, Power Solutions International and its executives made materially false and misleading statements to investors throughout the Class Period about the company’s ability to capitalize on the booming data center market and the nature of its manufacturing challenges.

Throughout the Class Period, the company allegedly misled investors by repeatedly touting its pivot into the “rapidly expanding data center sector” as a source of high-growth, higher-margin revenue while concealing that its manufacturing ramp-up was causing significant operational problems. Specifically, the lawsuit alleges the following:

• Overstating Data Center Market Capture – The complaint alleges that Power Solutions overstated its ability to capture sales demand for its power systems solutions within the data center market. Throughout the Class Period, executives repeatedly characterized the company’s data center pivot as delivering “strong demand” for its power systems solutions and driving “higher growth, higher-margin” revenue, statements the complaint alleges were materially false and misleading.
• Mischaracterizing Manufacturing Inefficiencies as “Temporary” – The company repeatedly attributed declining gross margins to “temporary inefficiencies related to our accelerated production ramp-up.” The complaint alleges these characterizations were false — the operational problems were structural, not temporary, and management knew or recklessly disregarded that the inefficiencies would persist and continue to erode margins.
• Materially Misleading Positive Statements – Throughout the Class Period, Power Solutions executives made a series of positive statements about the company’s operational performance, production capabilities, and growth trajectory that the complaint alleges were false and misleading considering the undisclosed manufacturing problems. The company touted record quarterly results and “strong demand” even as gross margins declined from 29.7% to 23.9% year-over-year by Q3 2025.

Stock Price Decline and Investor Harm

The complaint further alleges that as the truth about Power Solutions’ manufacturing problems and overstated data center capabilities emerged, investors suffered significant losses According to the complaint, these disclosures contributed to declines in the company’s stock price:

• November 6–7, 2025: Power Solutions released third quarter 2025 financial results revealing gross margin had declined 5.0% year-over-year due to “temporary inefficiencies related to our accelerated production ramp-up” for “key data center product lines.” The Company also disclosed a sharp deceleration in projected annual sales growth, from 74% in Q2 to an anticipated 45% for full year 2025. Following these disclosures, the stock fell $15.55, or 19.14%, to close at $65.69 per share on November 7, 2025.
• March 2–3, 2026: Power Solutions announced fourth quarter and full year 2025 financial results revealing that gross margin declined 8.0% year-over-year due to “operating inefficiencies related to our accelerated production ramp-up for data center product lines.” The Company provided a 2026 outlook projecting only “moderate margin improvement” and disclosed that it was only now “beginning to see measurable improvements” after executing “specific actions” to address supply chain and manufacturing cost issues. Following these disclosures, the stock fell $24.84, or 28.97%, to close at $60.91 per share on March 3, 2026.

Power Solutions International Lawsuit | Legal Claims

The complaint asserts that the defendants’ actions violate federal securities laws, specifically:

• Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 – These provisions prohibit the use of any manipulative or deceptive device in connection with the purchase or sale of securities. The complaint alleges that Power Solutions International and its executives violated these provisions by omitting material facts and making false and misleading statements about the company’s data center market capabilities, its manufacturing inefficiencies, and its business operations and prospects.
• Section 20(a) of the Securities Exchange Act of 1934 (Control Person Liability) – Section 20(a) provides that individuals who control a company can be held liable for the company’s securities law violations. The complaint alleges that Dino Xykis (CEO) and Xun Li (CFO) controlled the decision making of the company as well as the content and dissemination of the false and misleading statements about the company’s performance.

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Power Solutions International and its top executives allegedly misled investors by repeatedly characterizing its data center manufacturing challenges as “temporary” while concealing that the operational problems were structural and would continue to erode margins — all while touting record sales and “strong demand” for its power systems solutions.

Peiffer Wolf is currently investigating potential Rule 10b-5 violations involving Power Solutions International securities sold to retail investors. If you purchased PSIX (NASDAQ: PSIX) securities during the Class Period and suffered losses, Contact Us for a Free Case Evaluation by filling out an online form or calling 585-310-5140.

Important: The deadline to seek lead plaintiff status in this lawsuit is on or about May 19, 2026.