SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a securities class action lawsuit has been filed in the Central District of California on behalf of purchasers of HF Foods Group Inc. (NASDAQ:HFFG) securities between August 23, 2018 and March 23, 2020 (the “Class Period”). The case is captioned Mendoza v. HF Foods Group Inc., No. 20-cv-02929, and is assigned to Judge Otis D. Wright, II. The HF Foods securities class action lawsuit charges HF Foods and certain of its current and former officers with violations of the Securities Exchange Act of 1934.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased HF Foods securities during the Class Period to seek appointment as lead plaintiff in the HF Foods securities class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the HF Foods securities class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the HF Foods securities class action lawsuit. An investor’s ability to share in any potential future recovery of the HF Foods securities class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the HF Foods securities class action lawsuit or have questions concerning your rights regarding the HF Foods securities class action lawsuit, please visit our website by clicking here or contact Brian Cochran at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions for the HF Foods securities class action lawsuit must be filed with the court no later than May 28, 2020.
HF Foods markets and distributes produce, frozen and dry food products, and non-food products to Asian restaurants and other foodservice customers throughout the Southeast, Pacific, and Mountain West regions of the United States. On June 25, 2019, HF Foods announced its merger with B&R Global Holdings, Inc.
The HF Foods securities class action lawsuit alleges that defendants made false and misleading statements and/or failed to disclose that: (i) HF Foods engaged in undisclosed related-party transactions; (ii) HF Foods insiders and related parties were enriching themselves by misusing shareholder funds; (iii) HF Foods was “gaming” the FTSE/Russell Index by masking the true number of shares free floating; and (iv) as a result, defendants’ public statements were materially false and/or misleading at all relevant times.
On March 23, 2020, Hindenburg Research published a report revealing that HF Foods had, among other issues, failed to disclose: (i) transactions with related parties; (ii) its flagrant misuse of shareholder funds; and (iii) its gaming of the FTSE/Russell Index criteria. Specifically, regarding HF Foods’ undisclosed related-party transactions, the report noted that HF Food’s “massive $509 million merger with food distributor B&R appears to be a blatant undisclosed related-party transaction” and that the report’s authors believed HF Food insiders were using “related-party transactions to suck cash out of the business, eventually leaving shareholders with a hollow, debt-laden company.”
As for HF Foods’ misuse of shareholder funds, the report revealed that HF Foods “appears to have also used shareholder cash to purchase an undisclosed fleet of exotic supercars including Ferraris, Porsches, and a Bentley.” And with regard to HF Foods’ “gaming” of the FTSE/Russell Index criteria, the report explained that the “B&R merger more than doubled [HF Foods’] share count. However, FTSE/Russell mistakenly included almost all of these shares as part of [HF Foods’] free float, which sent [HF Foods’ stock] price and volume soaring on Friday’s index rebalancing . . . . We believe [HF Foods] and its insiders are masking the true number of shares held by its affiliates. Once made clear to FTSE/Russell, we expect the recent forced index buying in [HF Foods] will reverse and become forced selling.” On this news, the price of HF Foods’ stock fell by more than 20%.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations, and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.