NEW YORK--(BUSINESS WIRE)--Pomerantz LLP announces that a class action lawsuit has been filed against LongFin Corp. (“LongFin” or the “Company”) (NASDAQ: LFIN) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 18-cv-03462, is on behalf of a class consisting of investors who purchased or otherwise acquired Longfin securities between December 15, 2017 through April 2, 2018, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Longfin securities between December 15, 2017, and April 2, 2018, both dates inclusive, you have until June 4, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Longfin purports to be an independent finance and technology company that offers commodity trading, alternative risk transfer, and carry trade financing services. It also provides hedging and risk management solutions to importers, exporters, and small medium business enterprises.
Shortly after going public, Longfin announced that it was buying Ziddu.com (“Ziddu”) to enable global trade through the use of blockchain technology. Longfin purchased Ziddu from an affiliate of its Chief Executive Officer and Chairman, Venkata S. Meenavalli, in exchange for 2.5 million Longfin Class A common shares.
On this news, the price of Longfin stock increased from $5.39 per share on December 14, 2017, to close at $72.38 per share on December 18, 2017, an increase of more than 1,200% in just two trading days.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Longfin had misrepresented material facts about its business and operations, including the extent of its capabilities at its New York offices and the identity and qualifications of key employees; (ii) Longfin had material weaknesses in its operations and internal controls over financial reporting; (iii) Longfin was ineligible for inclusion in the Russell Indices; (iv) Longfin’s lack of profitability had imperiled its ability to continue as a going concern; and (v) as a result of the foregoing, Longfin’s financial statements and Defendants’ statements about Longfin’s business, operations, and prospects, were materially false and misleading at all relevant times.
On March 26, 2018, Citron Research posted a tweet on Twitter.com accusing the Company of inaccuracies in its financial reporting and fraud. The same day, FTSE Russell issued a statement announcing that Longfin would be removed from its global indices after market close on March 28, 2018, approximately 12 days after being added.
On this news, Longfin’s share price fell $11.82, or 16.62%, to close at $59.28 on March 26, 2018. The stock continued to decline over the next trading sessions, closing on April 2, 2018, at $14.31 per share, for a total decline of $61.21 per share since the stock’s close on March 23, 2018.
On March 27, 2018, CNBC published an article entitled “Longfin loses more than a third of its value after the controversial cryptocurrency stock is booted from the Russell 2000 index.” In the article, Meenavalli stated that Longfin would be taking “‘legal action’” against Citron for its negative comments.
On this news, Longfin’s share price fell $17.42, or 50.23%, over two trading days, to close at $17.26 on March 29, 2018.
On April 2, 2018, after the market closed, Longfin filed its annual report on Form 10-K with the Securities and Exchange Commission for its 2017 fiscal year. The filing revealed that the Company was subject to an SEC investigation (which later led to a Court-imposed freeze on $27 million in illicit trading proceeds), suffered from a multitude of material weaknesses in its internal controls over financial reporting, and may not be able to continue as a going concern.
On this news, Longfin’s share price fell $4.42, or 30.88%, to close at $9.89 on April 3, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com