Christina Spicer  |  March 16, 2021

Category: Legal News

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Companies accused of artificially inflating stokc prices

A trio of class action lawsuits filed today in federal court against the companies Bit Digital, Neptune, and Sequential Brands claim investors were duped by artificially inflated stock prices. 

Bit Digital, ‘Fake’ Crypto Company, Accused of Theft 

A class action filed in New York federal court claims that Bit Digital, a crypto company, lied about its bitcoin mining activities.  

The Bit Digital class action lawsuit seeks to represent investors who purchased securities in the company between Dec. 21, 2020 and Jan. 11, 2021. Lead plaintiff, Joseph Franklin Monkam Nitcheu, claims that he and other investors were scammed into “a fake cryptocurrency business” “designed to steal funds from investors.” 

The class action lawsuit alleges that the company claimed to have over 22,000 bitcoin miners operating in China. However, on Jan. 11, 2021, a research company investigating the operation announced that they had verified with local governments that there were no bitcoin miners operating in their area. Bit Digital stock plummeted after the announcement, says the lawsuit.  

Wellness Company Allegedly Misled Investors About Financial Health 

In another class action lawsuit filed in New York federal court, an investor claims that the “integrated health and wellness company” Neptune made false and misleading statements about its business, operations, and compliance policies.  

Lead plaintiff, Marvin Gong, says that between July 24, 2019 and Feb. 16, 2021, Neptune enticed investors with false claims about the resources it would need to run its recent acquisition, SugarLeaf. As a result, the company was forced to announce disappointing financial results on Feb. 15, 2021, leading to a 30 percent drop in its stock price.  

Consumer Goods Company Artificially Inflated Stock 

Investors in California echoed similar claims of misleading statements in a class action lawsuit filed today against Sequential Brands Group, a fashion, footwear, and home goods company. Sequential allegedly misled investors by releasing financial statements that failed to properly account for “goodwill” and other intangible assets.

Lead plaintiff, Peter D’Arcy, says that Sequential Brands artificially inflated its stock prices in 2016 and 2017. D’Arcy says that company executives delayed reporting information that would have negative effects on the company’s financial accountings. When the truth emerged in November of 2017, the company’s stock took a 38 percent dip, says the class action lawsuit. 

Did you purchase securities from Bit Digital, Neptune, or Sequential Brands? Tell us about your experience in the comment section below.  

The lead plaintiff in the Sequential class action is represented by Laurence M. Rosen of The Rosen Law Firm, P.A. 

The lead plaintiff in the Neptune class action is represented by Jeremy A. Lieberman, Patrick V. Dahlstrom, and J. Alexander Hood II of Pomerantz LLP.  

The lead plaintiff in the Bit Digital class action is represented by Jeffrey C. Block and Stephen J. Teti of Block & Leviton LLP.  

The Inflated Stock Prices Class Action Lawsuits are Peter D’Arcy v. Sequential Brands Group, Inc., et al., Case No. 2:21-cv-02305, in the U.S. District Court forth the Central District of California; Marvin Gong v. Neptune Wellness Solutions, Inc., et al., Case No. 2:21-cv-01386, in the U.S. District Court for the Eastern District of New York; and, Joseph Franklin Monkam Nitcheu v. Bit Digital, Inc, et al, Case No. 1:21-cv-02262, in the U.S. District Court for the Southern District of New York.  

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