In light of the recent short attack on Aphria, many investors lost money. Some of them are now pressing charges against the company for failing to disclose material information.
Exactly two weeks ago, one of the largest cannabis producers in the world got hit by what could have proven to be a very damning case, but turned out to be nothing more than a short attack.
A known short-seller Gabriel Greco made his case against Aphria, condemning the company of falsely reporting its foreign assets and overpaying for the acquisitions of the said assets.
In a 30-page report against Aphria, Greco laid out what many interpreted as forensic evidence and the massive sellout of Aphria stock started.
The weekend before the short-attack Aphria’s stock was trading at around $10.50 CAD.
On December 3, following the release of the Hindenburg Research article, Aphria’s share price fell $1.85 per share, or over 23%, to close at $6.05.
The day after, the share price fell $1.54 per share, or over 25%, to close at $4.51, and that was after the execs bought over 250,000 of shares as a show of faith.
At one point, trading was halted by the financial authorities and Aphria released a short rebuttal that didn’t do much to assure their investors.
KSF to sue Aphria
In the latest turn of events, Kahn Swick & Foti LLC is filing a lawsuit against Aphria for failing to disclose material information.
The lawsuit is spearheaded by KSF Managing Partner Lewis Kahn and the former Attorney General of Louisiana, Charles C. Foti, Jr.
The two released a press release in order to remind investors that they have until February 4, 2019, to file lead plaintiff applications in a securities class action lawsuit against Aphria.
All investors with losses in excess of $100,000 can apply to be the lead plaintiffs in a class action lawsuit against Aphria up until February 4, 2019.
Seeing how Aphria is listed on the New York Securities Exchange, the action is pending in the United States District Court for the Southern District of New York, and the case is Gloschat v. Aphria Inc. et al, 18-cv-11427.
Aphria and some of its executives are charged with failing to disclose material information during the Class Period, violating federal securities laws, according to the press release.
Another class-action lawsuit filed against Aphria
RM LAW, P.C. based in Pennsylvania is also filing a class-action lawsuit against Aphria that seeks to recover damages against defendants for alleged violations of the federal securities.
According to the press release, Aphria failed to disclose three very crucial things.
Firstly, Aphria didn’t disclose that the Latin American assets acquired by the company lacked adequate licenses to operate and were overvalued.
Secondly, the company didn’t disclose that the acquisition of the Latin American assets would enrich Aphria’s CEO and other insiders at the expense of shareholders.
Lastly, as a result of the foregoing, the defendants’ positive statements about Aphria’s business, operations and prospects were materially misleading and lacked a reasonable basis.
RM Law is also reminding those damaged in the recent short attack that they may request that the Court appoint you as lead plaintiff of the class up until February 4, 2019.