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Securities

Mixed Martial Arts Fight

This securities class action centers on Alliance MMA’s and false or misleading statements made by the company in its Registration Statement in relation to its 2016 initial public offering (IPO). On April 12, 2017, the company filed a Form 8-K that said in part that the condensed consolidated financial statements “should no longer be relied upon because of an error in recognizing as compensation transfers of common stock by an affiliate of the Company to individuals who were at the time of transfer, or subsequently became, officers, directors, or consultants of the Company.” The complaint claims that the errors were violations of the Securities Act of 1933. 

Ocwen Logo on Building

The complaint for this securities class action doesn’t focus on the Ocwen’s original “rampant and systemic failures” in servicing mortgages. Instead, it focuses on a period after regulatory agencies had sanctioned it, when, according to the complaint, Ocwen made false or misleading public statements indicating that it was remedying its problems. The complaint says this artificially inflated its stock and caused losses when investors found out it had not been doing so. 

Lit Board with Values

The Catalyst Futures Fund claimed to have a focus on preserving capital (and therefore an aversion to excessive risk), yet the complaint for this class action claims it continued to use the complex and risky strategies it had employed when it was a hedge fund. According to the complaint, this was a violation of the Securities Act of 1933, and it resulted in a loss of over a billion dollars in fund assets. According to the complaint, the fund had taken out large options contracts that shorted the S&P 500, but they failed to pay off. The complaint claims that the bets were out of proportion with the risk profile for the fund. 

NQ Mobile Logo

This securities class action stems from a sale of assets by NQ Mobile, purportedly to Tongfang Investment Fund. However, the complaint claims that the assets were actually bought by an NQ Mobile insider and that the terms of the deal have ramifications for NQ that were not disclosed to the public, in violation of the Securities Exchange Act of 1934. The evidence centers around the increase in the percentage of the assets’ ownership by NQ’s chairman and NQ’s acceptance of a note in partial payment for the assets a year after the assets’ transfer.

Aflac Duck Head

Aflac Incorporated’s public statements included assurances about ethics, the excellent treatment of employees, and even a homey little recollection of someone’s mother’s “persistent wisdom” about looking out for others. But the complaint alleges that in reality the company was acting very differently, making its statements violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On January 11, 2018, The Intercept published a report revealing lawsuits against the company alleging exploitation of workers, manipulation of accounting, and insider trading. The news caused stock losses to investors.

Bristol-Myers Squibb Sign on Building

Investors depend on pharmaceutical companies for accurate descriptions of the findings of their drug trials. Unfortunately, the complaint for this class action claims that Bristol-Myers Squibb Company violated the Securities Exchange Act of 1934 by providing misleading information while its drug trials for cancer drug Opdivo were in progress. The complaint claims that the company failed to disclose that the study was more likely to fail than the company was representing, and later, that the failure was more severe than its first announcement revealed.

Johnson & Johnson Baby Powder Bottle

Is forty years enough time for a company to remove harmful ingredients from a product? The complaint for this securities class action claims that Johnson & Johnson knew that its talc contained asbestos as early as 1972 but hid this from the public. According the complaint, 5,000 lawsuits have been filed against the company by victims of ovarian cancer and mesothelioma, illnesses purportedly caused by asbestos, some of which have revealed documents indicating that the company has known about the problem for decades.

Super Micro Computer Motherboard

Super Micro Computer, Inc. filed results for its second and third quarters of 2017—and then cast doubt on them, without clarifying the extent of the problem or when it would be solved. The complaint for this class action claims the company violated the Securities Exchange Act of 1934 by making false or misleading statements in its public filings, involving both accounting errors and Sarbanes-Oxley (SOX) certifications of internal control over its reporting. The problem seems to have centered on the assigning of transaction revenue to certain quarters, and by the end of the class period, the company was still unsure of what the effect would be on its historical financial statements.

Trulance Logo

In announcing a $300 million loan, the complaint for this class action claims, Synergy Pharmaceuticals failed to disclose its terms and other conditions that were important to investors, making the announcement misleading and a violation of the Securities Exchange Act of 1934. Among other things, the company had not disclosed that it would need to issue additional shares of stock to meet the terms of the loans. 

Funko Dolls Sulley and Boo

It’s not a good sign when Bloomberg Gadfly publishes an article on a company entitled, “Funko Extends Playtime to Its Accounting.” The complaint for this class action quotes from that article to explain the falsity of at least one of the figures in the company’s financial statements. According to the complaint, Funko, Inc.’s Registration Statement, including a Prospectus, for its initial public offering (IPO) was misleading, in violation of the Securities Act of 1933. 

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