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IPO Misstatements

Sprouts Farmers Market Store Interior

Prior to a public offering of stock, companies are required to disclose events or uncertainties, including any known trends, that may cause a change in future financial figures. The complaint for this securities class action alleges that Sprouts Farmers Market, Inc. compiled offering documents that did not meet this requirement and violated of the Securities Act of 1933. According to the complaint, the documents discussed the risk of deflation in the abstract, but did not note that deflation had already begun for certain products. 

Rewalk Exoskeleton

Complex medical devices are regulated by the Food and Drug Administration (FDA). If a company doesn’t have FDA approval for a device, it doesn’t have a product. The complaint for this securities class action claims that Rewalk Robotics Ltd. could not provide the FDA with an adequate plan for a post-market surveillance study of its exoskeletons, and that it also failed to inform investors of the reasons for the study, the FDA’s safety concerns, its failure to respond adequately, or the risks these things posed to the company, in violation of the Securities Act of 1935 and the Exchange Act of 1934.

Avinger Lumivascular Technology

The complaint for this class action alleges that Avinger, Inc. knew about problems with its products and technology by the time of its initial public offering (IPO) in January 2015, but did not disclose them in its Registration Statement or Prospectus, as required by the Securities Act of 1933. By the time it announced its poor first-quarter 2017 results, the company admitted it had had problems with product reliability and the commercialization of its Lumivascular technolocy, and that it was laying off about a third of its workforce and almost half of its sales force.

Sky Solar Solar Panels

Can the same person be essential to a company’s success and a liability to the company? The complaint for this class action alleges that the Registration Statement and Prospectus for Sky Solar Holdings, Inc.’s initial public offering (IPO) contained false and misleading statements about founder Weili Su as well as about the solar market and other factors in the countries in which it was operating that artificially inflated the price of its shares. The 104-page complaint claims that the company’s various omissions and false or misleading statements were violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 10(a) of the Securities Exchange Act of 1934.

Company Name on Computer Screen

It’s unfortunate that certain aspects of Apigee Corporation’s business were in decline or about to decline when it held its initial public offering (IPO), but the complaint for this class action alleges that Apigee negligently or deliberately hid this fact from investors, in violation of Sections 11 and 15 of the Securities Act of 1933. The complaint claims that the company did not reveal that Amazon was bringing out a competitive product, that its recent revenues had been bolstered by several large purchases that would not be repeated, or that demand for its products had been declining.

Forterra Water Pipes

Investors make decisions based largely on what a company’s financial information indicates about its future operating results. However, if “events and uncertainties” exist that might cause a company’s future results to be very different, its SEC filings must reveal them. The complaint for this class action claims that Forterra’s filings for its initial public offering (IPO) did not disclose these events or uncertainties, in violation of the Securities Act of 1933. They include such things as the resignation of its COO and senior management members, declining sales, downward price pressure, and weaknesses in internal controls.

Image of Shoppers with Chinese Characters for Qudian

Eight underwriters were involved in Qudian’s initial public offering (IPO), but the complaint for this class action claims that the Registration Statement they caused to be filed was misleading, omitting critical information in two respects, (1) in discussing the company’s collection practices and (2) in discussing its data systems and procedures. The complaint alleges that the data collection practices were insufficient and virtually nonexistent, and that the data security systems were inadequate, so that security breaches had already occurred. 

Tintri Logo

When Tintri, Inc. decided to go public, it made the required filings of Registration Statement and Prospectus with the Securities and Exchange Commission (SEC). The initial public offering (IPO) raised $60 million for the company, but the complaint for this class action claims the filings contained false and misleading statements, in violation of Sections 11 and 15 of the Securities Exchange Act of 1934.

OvaScience Logo

With women preferring to have children at later ages, successful fertility treatments are a promising product, even for a company that has not yet earned any revenue. According to the complaint, however, OvaScience, Inc. made misrepresentations about its Augment procedure in the Registration Statement for its initial public offering (IPO), in violation of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933. The complaint claims that, among other things, the company tried to avoid FDA regulation, used too small a sample size and a flawed study design, and tried to claim a success rate that the study did not in fact show.

Chin with Pimple

Novan, a drug development company, was testing a drug for acne vulgaris when it held its initial public offering (IPO) on September 26, 2016. The complaint for this class action claims that Novan’s public statements omitted important information, for example that two “identically-designed” drug trials were not in fact identical, leading investors to believe that the drug was more promising than it was. By early December, its stock price had climbed from an initial $11 to $29.09 a share—and then came a sharp drop to around $4.86, when Novan announced the results of its trials for the new drug.

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