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Stock Losses

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.

FleetCor Building

FleetCor presented its growth as a result of the company’s “geographic reach,” good products, lower billings, customer satisfaction, and good sales force, among other things. These claims were false, says the complaint for this class action, and violated the Securities Exchange Act of 1934. The truth, the complaint alleges, was that FleetCor misrepresented its charges in marketing materials, charged customers unwarranted fees, cashed payment checks late, and otherwise mistreated customers who used its fuel cards.

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.

Aaron's "Lucky Dog" Logo

Aaron’s, Inc. touted its profitable subsidiary Progressive Finance Holding, LLC, as one of its strengths, but, according to the complaint for this class action, during the class period, it omitted mention of a very important event in Progressive’s story, in violation of the Securities Exchange Act of 1934. On October 30, 2015, the company admitted that Progressive had lost two critical data feeds in February—nine months previously—and “experienced higher bad debt expense and merchandise write offs” due to the problem. 

Two Fish, Looking Concerned

Some companies hide falling revenues or the loss of important personnel; some hide the results of studies of their products or the implications of impending events. But the complaint for this class action claims that Pingtan Marine Enterprise Ltd. was hiding, among other things, “violent ‘torture ships’ that implicate Pingtan in the modern-day slavery that has infected pockets of South East Asia’s fishing industry.”

Weibo Icon on Cell Phone

The People’s Republic of China (PRC) exerts extensive control over information broadcast or published within its borders. The complaint for this class action claims that Weibo Corporation presented itself as observing all such laws, when in reality it did not even have a government license permitting it to operate its business. On June 22, 2017, the Wall Street Journal came out with an article entitled “China Bans Political Content from Three More Platforms”—one of the three being Weibo. Weibo said it would “evaluate the impact” of the action “on its operations and its administrative options.”

Mattel Logo with Mattel Characters

The complaint for this class action claims that Mattel engaged in “channel stuffing”, a practice involving inducing buyers to stock up on inventory by offering price discounts, extended payment terms, or other concessions. According to the complaint, when channel-stuffing is used to create a false impression of a company’s financial and operational status, it is illegal. The complaint quotes former employees to show the pressures and circumstances behind the actions, and to provide evidence that Mattel knew what it was doing. 

ZTO Express Truck

Chinese company ZTO Express (Cayman) Inc. held a public offering of American Depository Shares (ADSs) in October 2016 at which it sold over 72 million ADSs. But the complaint for this class action alleges that the company both made untrue statements and omitted material facts in its Registration Statement, violating the Securities Act of 1933. The company claimed to have a high operating margin, partly due to a “highly scalable network partner model” and talked about tremendous growth. But the complaint claims that the “network partners” handled the low-margin pickup and delivery services, which were kept off ZTO’s books, while ZTO claimed only the more profitable core hub operations.

B Communications Logo

The complaint for this securities class action makes clear that the Securities Exchange Act of 1934 requires honest reporting of all factors that could influence a company’s performance, including criminal activity. The events in question revolve around three related companies—Eurocom, its indirect subsidiary B Communications, and B’s subsidiary Bezeq—and the actions of Shaul Elovitch, who was Chairman of the Boards of all three companies.

Sinovac Logo

Bribery and corruption are secretive activities, but securities laws still require the honest reporting of these actions. According to the complaint for this class action, Sinovac Biotech Ltd. violated the Securities Exchange Act of 1934 by not reporting an instance of bribery by the company’s CEO, Weidong Yin. An analyst company’s accusation about the bribery caused the stock price to fall, set off an internal investigation, and resulted in a subpoena from the SEC.