Jul 17, 2017 | Securities Class Action Archive
Class Action Lawsuit Filed Against DryShips
A class action lawsuit was filed in United States District Court, Southern District of New York, on behalf of a class of investors who purchased or otherwise acquired DryShips’ securities, seeking to recover damages caused by DryShips’ (NASDAQ:DRYS) violations of the Securities Exchange Act of 1934.
The lawsuit alleges that between June 8, 2016 and July 12, 2017 (the “Class Period”), DryShips made materially false and misleading statements regarding DryShips’ business, operational and compliance policies. Specifically, DryShips made false and/or misleading statements and/or failed to disclose that: (i) DryShips engaged in a systemic stock-manipulation scheme to artificially inflate DryShips’ share price; (ii) DryShips’ transactions with British Virgin Islands firm Kalani Investments Ltd. (“Kalani”) were an illegal capital-raising scheme, due, in part, to Kalani’s failure to register as an underwriter with the SEC; and (iii) as a result of the foregoing, DryShips’ public statements were materially false and misleading at all relevant times.
The Wall Street Journal Reports About DryShips’ “Bizarre Stock Maneuvers”
On July 13, 2017, The Wall Street Journal published an article, “A Shipping Company’s Bizarre Stock Maneuvers Create High Seas Intrigue,” which, among other things, reported:
When a company’s stock drops 99.9% in six months, there’s probably a story there. When, despite that carnage, the company’s assets double during the same period, even more so.
And when 1.68 million of the company’s shares held early last year equal exactly one share today, well, what is going on?
The locus of these bizarre doings is DryShips Inc . . . a Greek carrier that has been tracing one of the wildest rides in recent stock-market history, causing half a billion dollars of traders’ money to vanish and, it appears, making two wealthy men wealthier.
DryShips’ shares occupy a murky world of tiny stocks where information is limited and investors often bet on short-term moves. Worth barely $5 million on the stock market in early November, the company became a hot topic on stock discussion boards when its shares suddenly leapt 1,500% in four trading days.
That the company had just disclosed a huge loss and suspended debt payments “to preserve cash liquidity” evidently didn’t matter to buyers who wanted in while the stock was on fire.
But even as they were buying, the company was creating vast numbers of new shares. These it was selling at a discount to an obscure British Virgin Islands firm, which was quickly unloading many or all of the new shares.
. . .
Since then, DryShips has repeatedly printed huge numbers of new shares and sold them to the British Virgin Islands firm, on such a scale that virtually every share in existence today has been created since November.
In an apparent effort to counter the downward pressure that this new supply of shares put on the price, DryShips used another technique: reverse stock splits.
. . .
On June 8, 2016, DryShips sold Kalani securities convertible into $5 million worth of new DryShips common shares, which was equivalent to a little under 10% of the shipping company’s market value then. It was a small foretaste of what was to come.
Kalani didn’t report a 5% or more stock ownership, as U.S. regulations require, indicating it rapidly sold many of these new DryShips shares. And in succeeding weeks, DryShips’ stock tumbled.
By September, DryShips was preparing paperwork to do two things: execute a reverse stock split and issue a far larger batch of securities to Kalani.
Issuing so many new shares would normally be unrealistic for a company with a tumbling stock, but on Nov. 9 DryShips’ stock suddenly tripled, ending the day up 133%. Nasdaq temporarily halted trading four sessions later with the stock up 1,500%.
. . .
When trading resumed two days later, DryShips announced it was selling a second batch of securities to Kalani—securities the offshore firm could convert into $100 million of new DryShips common stock.
That was nearly 20 times what the entire company was worth before its stock’s mysterious rally.
DryShips gave no information about Kalani in securities filings or public statements when it sold the firm shares, except to say that Mr. Economou wasn’t affiliated with the firm. Details of Kalani’s ownership are protected by secrecy laws in the British Virgin Islands.
. . .
Even so, investor chat rooms lit up with speculation that another epic rally could be in store, given the sudden inflow of cash to the company’s coffers. Mentions of DryShips on an investing site called StockTwits, which had totaled only about 77 a week before the November rally, soared to an average of about 18,000 a week over the following four months.
The enthusiasm allowed DryShips to create and sell still more shares. In three additional deals with Kalani, the shipper agreed to sell it securities convertible into $626.4 million of new DryShips common shares.
That was equal to about 100 times DryShips’ stock-market value in early November.
To keep its stock price from falling below $1, necessary to avoid delisting, DryShips kept doing reverse stock splits—not only one on Nov. 1 but also one on Jan. 23, one on April 11, one on May 11 and one last month, on June 22. All had the approval of Nasdaq, where the stock trades.
The Wall Street Journal also reported that
[l]egal experts said the quick sales raise questions for regulators. “If [Kalani is] buying it with the intent to resell, then they’re acting as an underwriter and this is a public offering,” said Jill Fisch, a University of Pennsylvania law professor who specializes in securities regulation. In an underwriting, a licensed entity, normally a bank, sells shares to the public and gives the proceeds to the company.
James Angel, a financial-markets expert at Georgetown University, said the deal sounds like a “pseudo-underwriting.”
Kalani isn’t registered the . . . Securities and Exchange Commission as an underwriter. That means it is possible “both the company and the intermediary are on the hook for violating securities laws,” Ms. Fisch said.
. . .
The tens of millions of new DryShips shares created have hammered long-term investors through stock dilution on a grand scale, since far more shares now have a claim on the company.
Investors who bought DryShips[‘] shares last fall and held on have lost almost all of their money. A $10,000 investment in DryShips stock at the beginning of November was worth $167,000 two weeks later, during the brief price spike, but only about $2 today.
Splash24/7 Reports DryShips Named Defendants in High Court Action
On July 5, 2017, splash247.com reported that “DryShips and its chairman and chief executive officer George Economou have been named as defendants in a lawsuit filed in the High Court of the Marshall Islands which alleges breaches of fiduciary duty, unjust enrichment, and conflict of interest.”
Further, splash247.com reported that “[i]n May, DryShips was deemed the worst listed company for corporate governance in a regularly updated poll carried by investment bank Wells Fargo and its equity analyst Michael Webber.”
Do You Own DryShips’ Securities?
If you purchased or otherwise acquired shares in DryShips and would like to speak privately with a securities attorney to learn more about the investigation, fill out the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; or send an e-mail to [email protected].
About Kehoe Law Firm, P.C.
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Jul 13, 2017 | Securities Class Action Archive
Amec Foster Wheeler plc – Investigation on Behalf of Investors
Kehoe Law Firm’s securities attorneys are investigating potential claims on behalf of investors of Amec Foster Wheeler plc (NASDAQ:AMFW) involving possible securities law violations.
On July 11, 2017, Amec Foster Wheeler disclosed that it was being investigated by the U.K.’s Serious Fraud Office for “past use of third parties and possible bribery and corruption and related offenses.”
Following this news, Amec Foster Wheeler’s share price fell by 4.57% on July 11, 2017. The company’s shares fell an additional 2.3% on July 12, 2017, causing significant harm to investors.
Amec Foster Wheeler Investigated by The Serious Fraud Office
As reported on July 11, 2017 in The Telegraph:
Amec Foster Wheeler is being investigated by the Serious Fraud Office over its dealings with Unaoil over possible bribery and corruption through payments to middlemen.
The energy support services group rushed out a regulatory announcement on Tuesday evening confirming the formal launch of a probe by the watchdog.
In May the company signalled it could be in the SFO’s sights in documents relating to its £2.2bn merger with peer Wood Group.
Circulars detailing risks to deal revealed that a Wood Group business “engaged Unaoil and that the joint venture made payments to Unaoil under agency agreements”.
Agency agreements are widely understood to mean payments to third parties which can be used to pay bribes, though there is no indication that this happened with Wood’s joint venture.
The Telegraph also reported:
Unaoil is at the centre of a global corruption scandal with allegations that it paid bribes to secure deals. Petrofac has already been dragged into the scandal with its executives questioned by the SFO, though the company has said previously it has not found any evidence of wrongdoing.
Wood Group has said it [is] conducting an internal investigation into its dealings with Unaoil and relevant local regulators and prosecutors had been informed.
In the merger documents it said it had not “confirmed that the payments made… to Unaoil were used by Unaoil in ways that would amount to bribery, corruption or money laundering offences, or that there was any involvement in or knowledge of bribery, corruption or money laundering offences on the part of Wood Group companies, the joint venture or their personnel”.
If the investigations turn into full-scale prosecutions they could result in heavy fines which could deal a huge blow to the merged Amec-Wood business. . . .
Have You Purchased or Acquired Shares of Amec Foster Wheeler?
If you purchased or acquired shares of Amec Foster Wheeler and would like to speak privately with a securities attorney to learn more about the investigation and your potential legal rights, please fill out the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; or send an e-mail to [email protected].
About Kehoe Law Firm, P.C.
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Jul 11, 2017 | Securities Class Action Archive
Akari Therapeutics – Class Action Filed
A class action lawsuit has been filed against Akari Therapeutics Plc (“Akari”) (NASDAQ: AKTX) and certain of its officers, on behalf of shareholders who purchased Akari securities between March 30, 2017 and May 11, 2017, both dates inclusive (the “Class Period”).
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
Akari’s Alleged False and/or Misleading Phase 2 PNH Trial of Coversin Statements
The class action lawsuit alleges that throughout the Class Period, Akari made materially false and/or misleading statements, and/or failed to disclose that: its Chief Executive Officer, Dr. Gur Roshwalb, and possibly other executives, were involved in publishing false information about Akari, including the Phase 2 PNH trial of Coversin; that Akari lacked sufficient checks and protections to prevent such behavior; and that as a result of the above, Akari’s statements about its business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
Akari’s CEO Placed On Administrative Leave
On May 11, 2017, Akari announced that Dr. Roshwalb was placed on administrative leave while the Board of Directors reviews whether Dr. Roshwalb and other executives were involved in a materially inaccurate research report that was released and subsequently withdrawn on April 26, 2017 by Edison Investment Research Ltd. When this information reached the public, Akari’s stock price lowered materially, which harmed investors according to the Complaint.
What If I Have Akari Therapeutics Investment Losses?
If you purchased or otherwise acquired shares in Akari Therapeutics and would like to speak privately with a securities attorney to learn more information about this investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; or send an e-mail to [email protected].
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Jun 7, 2017 | Securities Class Action Archive
Jagged Peak Energy (NYSE: JAG) May Have Issued Materially Misleading Statements
Kehoe Law Firm’s securities attorneys are investigating claims on behalf of investors of Jagged Peak Energy, Inc. regarding allegations that Jagged Peak may have issued materially misleading statements regarding its business prospects to the investing public at the time of the company’s initial public offering (“IPO”). A class action lawsuit was recently filed alleging violations of federal securities laws.
Jagged Peak Energy IPO Raises More than $400 Million in Proceeds
On January 27, 2017, Jagged Peak Energy conducted its initial public offering, selling $31,599,334 shares at a price of $15.00 per share. The offering raised approximately $474 million in gross proceeds for the company. Since then, shares of Jagged Peak have dropped 15-20%, causing significant harm to investors.
Representations in IPO Documents
Although companies at the IPO stage are interested in ensuring a high offering price, they are required by law to provide an accurate and clear picture of prospects and risks in the Registration Statement and Prospectus. In the case of Jagged Peak, it is alleged in the complaint that Jagged Peak failed to disclose in its offering documents the risks of its acreage, including that many of its wells were positioned in an area where extractability had not been tested and, therefore, there was significant risk that its wells would produce less than other wells in the Southern Delaware Basin.
What Can I Do If I Have Jagged Peak Energy Investment Losses?
If you purchased or otherwise acquired shares in Jagged Peak Energy and would like to speak privately with a securities attorney to learn more information about this investigation, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], or send an e-mail to [email protected].
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Jun 5, 2017 | Securities Class Action Archive
Kehoe Law Firm’s securities attorneys are investigating claims on behalf of investors of Herbalife Ltd. (NYSE: HLF) regarding whether Herbalife and certain of its officers and/or directors violated federal securities laws. The company’s share price dropped by more than 7% in intraday trading on June 5, 2017, following news that it was unexpectedly lowering its sales guidance.
Herbalife Cuts Sales Forecast
On June 5, 2017, Herbalife announced that it was lowering its sales guidance due to new Federal Trade Commission regulations that will hurt its sales more than expected. This news comes just one month after the company announced it was raising its guidance, which drove the stock price up more than 50% year-to-date through Friday, June 2, 2017.
Key Herbalife Executives Depart
Several insiders at Herbalife sold stocks and options in the past month, and according to a recent blog, some executives, including general counsel Mark Friedman, have left the company, but the company has failed to disclose this fact to investors.
Herbalife Investment Losses?
If you purchased or otherwise acquired shares in Herbalife between May 4, 2017 and June 2, 2017 or would like to speak privately with a securities attorney to contribute to or learn more about the investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
May 31, 2017 | Securities Class Action Archive
Shareholder Alert – Investigation on Behalf of Asanko Gold Investors
Kehoe Law Firm, P.C. is investigating potential claims on behalf of investors of Asanko Gold, Inc. (NYSE: AKG) involving possible securities law violations.
On May 31, 2017, the investment research firm Muddy Waters, LLC published a report on Asanko asserting that: (1) Asanko made investments based on flawed geology in Ghana’s Nkran, Esaase mines that Muddy Waters believes “will never be recovered”; (2) Nkran is already experiencing a serious collapse of its west wall requiring a $75 – $115 million spend to keep mining, which is likely to cause Asanko to run out of liquidity in 2018; and (3) there are indications that some of Asanko’s resources models have been “smeared,” which would cause estimates of their ore contents to be inflated.
Following this news, the company’s share price plummeted more than 30% during intraday trading, causing significant harm to investors.
Asanko Gold Losses?
If you purchased Asanko Gold shares and would like to speak privately with a securities attorney to contribute to or learn more about the investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
