SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/riotblockchain/) today announced that a class action has been commenced on behalf of purchasers of Riot Blockchain, Inc. (“Riot”) (NASDAQ:RIOT) securities during the period between November 13, 2017 and February 15, 2018 (the “Class Period”). This action was filed in the Southern District of Florida and is captioned Roys v. Riot Blockchain, Inc., et al., No. 18-cv-80225.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from February 17, 2018. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, David C. Walton of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/riotblockchain/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Riot, certain of its officers and one of its major shareholders with violations of the Securities Exchange Act of 1934. Since October 2017, Riot has styled itself as a blockchain technology company. Before that time, Riot was a biotechnology company known as Bioptix, Inc. that specialized in the development of veterinary and life science diagnostic tools. On October 4, 2017, Bioptix announced it was changing its name to Riot Blockchain, Inc. and shifting its business focus to investing in and operating blockchain technologies with a particular focus on Bitcoin and Ethereum.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse material information regarding Riot’s business and operations. Specifically, the complaint alleges defendants failed to disclose that the Company had changed its name to Riot Blockchain, Inc. in order to generate investor enthusiasm and tie the Company to the recent rise in the price of cryptocurrencies despite its lack of a significant blockchain business in order to further an insider scheme that would allow Riot’s controlling shareholder Barry Honig and his associates to sell their Riot securities at artificially inflated prices. In addition, according to the complaint, Honig and other investors were effectively controlling Riot and its operations and exerting undisclosed influence over the Company and its CEO. As a result of defendants’ false statements and omissions during the Class Period, the prices of Riot’s securities were artificially inflated, with its stock trading at more than $38.00 per share.
On January 5, 2018, the Company announced that it had dismissed its auditor. On January 9, 2018, investor news site The Motley Fool published an article discussing the auditor’s dismissal and connecting it to the removal of two other auditors by Riot earlier in the year, which raised concerns about corporate governance and the legitimacy of the Company’s business. On this news, the price of Riot shares fell $3.58 per share, or nearly 15%, over four trading days. On February 12, 2018, Honig and certain of his associates, who had collectively owned or controlled nearly 30% of the Company’s outstanding shares, reported that they had reduced their share ownership to less than 5% of Riot’s outstanding shares. Then on February 16, 2018, CNBC published an article regarding questionable practices at Riot, revealing, among other things, that Honig appeared to be “the man behind the . . . curtain” at Riot, that Honig and other insiders had sold large amounts of Riot shares at times that coincided with increases in Riot’s stock price, that the Company’s CEO had a history of dealings with Honig and regularly consulted with him regarding the Company’s affairs, and that Riot had overpaid for Bitcoin mining machines from a less-than-two-week-old entity that appeared to have numerous ties to Company insiders. On this news, the price of Riot shares fell $5.74 per share, or 33%, to close at $11.46 per share on February 16, 2018.
Plaintiff seeks to recover damages on behalf of all purchasers of Riot securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS's SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.