Bitcoin Mining Rig Manufacturer Canaan Sued – Accused of Misleading IPO Investors


Bitcoin Mining Rig Manufacturer Canaan Sued - Accused of Misleading IPO Investors

Bitcoin mining rig producer Canaan Inc. is being sued for allegedly breaking U.S. securities legal guidelines earlier than its preliminary public providing (IPO). Phillippe Lemieux, a Canaan investor, filed a category-motion lawsuit that claims the corporate violated the Securities Act of 1933. Lemieux believes Canaan misled traders and the Securities and Change Fee (SEC) regarding the firm’s monetary wellbeing.

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Canaan Will get Into Scorching Water

In October 2018, the China-primarily based mining rig firm Canaan filed its IPO standing with the SEC and the agency hoped to lift $400 million. Nevertheless, Canaan solely raised $90 million when it was listed on the Nasdaq International Market. In 2020 the mining big’s IPO shares didn’t carry out so effectively and the corporate additionally confronted stiff competitors from producers like Bitmain, Microbt, and Innosilicon.

Canaan and Nasdaq listed CAN by way of a November 2019 JOBS Act Preliminary Public Providing (IPO). “CAN’s auditor, PWC Zhong Tian LLP, provides us little extra consolation as a result of the agency was charged by the SEC in 2012 for violating U.S. securities legal guidelines,” explains a not too long ago revealed Marcus Aurelius Worth report.

Now, in line with a lawsuit filed by Scott+Scott Attorneys, Canaan is being sued by an investor who believes Canaan misled traders previous to the IPO sale. “Scott+Scott, a nationwide securities and shopper rights litigation agency, is notifying traders that a class motion lawsuit has been filed in opposition to Canaan, Inc. (NASDAQ: CAN), and sure different defendants, associated to alleged violations of the Securities Act of 1933,” explains the regulation agency.

Stories word that the lawsuit in opposition to Canaan was invoked by the corporate’s investor Phillippe Lemieux who filed the category-motion lawsuit on Wednesday. The submitting stems from the District of Oregon and the authorized group is in search of different Canaan traders to hitch the case. Not solely does the lawsuit contact upon the grievances with Canaan, however the submitting additionally mentions the IPO underwriters Citigroup International Markets, China Renaissance Securities, Galaxy Digital, Huatai Monetary Holdings, and CMB Worldwide Capital. Lemieux alleges that sure data was withheld regarding Canaan’s monetary well being and the lawsuit submitting claims simply earlier than the IPO sale “quite a few” distributors have been faraway from the Canaan web site.

Phillippe Lemieux filed the category-motion lawsuit on Wednesday and alleged Canaan violated the Securities Act of 1933. The buyer rights litigation agency Scott+Scott’s submitting stems from the District of Oregon and the plaintiff is demanding a trial.

A Damning Marcus Aurelius Report

One particular violation Lemieux factors out is when Canaan ostensibly partnered with Hangzhou Grandshores Weicheng Expertise Co., Ltd. (Grandshores) for distribution functions. Lemieux’s Grandshores proof claims Canaan’s statements about this distribution alliance have been “materially false and/or deceptive as a result of they misrepresented and/or did not disclose the next adversarial details.”

Canaan is taken into account the world’s second largest cryptocurrency mining tools and utility-particular built-in circuit (ASIC) producer. The agency launched its preliminary public providing (IPO) with Nasdaq in This autumn 2019 elevating $90 million.

Along with the Grandshores statements, Lemieux’s lawyer cites a Marcus Aurelius Worth analysis report that finds a big quantity of deceptive statements. “Our analysis has uncovered a spread of irregularities and undisclosed dealings that lead us to consider CAN has deceived traders about its enterprise,” the extraordinarily essential Marcus Aurelius report discloses.

A Google Traits screenshot from the Marcus Aurelius Worth report. “We have been troubled to find that only one month earlier than CAN’s NASDAQ IPO, a tiny Hong Kong inventory named Grandshores (HK 1647) introduced a purported “strategic partnership” with CAN,” the Marcus Aurelius Worth report notes.

The submitting within the District of Oregon notes that Lemieux is demanding a trial by jury. His attorneys are hoping a trial will find yourself in favor of the plaintiff and the opposite class members and seeks to be awarded damages. The litigation agency working for Lemieux says the declare is delivered to the courts inside one yr after the invention of “unfaithful statements and/or omissions within the [IPO] that ought to have been made and/or corrected via the train of cheap diligence.” The lawsuit in opposition to Canaan is “subsequently well timed,” Scott+Scott’s court docket submitting concludes. On the time of publication, NASDAQ: CAN is just $four.26 a share and is down 11.7% at this time. When first reported on Canaan’s shares on January 10, 2020, the inventory was swapping for $6.49. This implies shares are down 34.36% since our report and down 52.61% because the Canaan IPO first launched at $eight.99 per share.

What do you consider the Chinese language mining rig producer Canaan being sued by an investor who claims Canaan misled traders earlier than the IPO? Tell us what you consider this matter within the feedback part beneath.

Disclaimer: This text is for informational functions solely. It isn’t a suggestion or solicitation of a suggestion to purchase or promote, or a advice, endorsement, or sponsorship of any merchandise, or firms. Neither the corporate nor the writer is accountable, instantly or not directly, for any injury or loss induced or alleged to be attributable to or in reference to the use of or reliance on any concepts, software program, mining rigs, mining rig producers, web sites, ideas, content material, items or providers talked about on this article. Worth reviews, market updates, and articles relating to inventory costs are meant for informational functions solely and shouldn’t be thought of as buying and selling recommendation. Neither nor the writer is answerable for any losses or good points, as the last word choice to conduct a commerce is made by the reader. Canaan share (NASDAQ: CAN) costs referenced on this article have been recorded on Friday, March 6, 2020, at three:30 p.m. ET.

Picture credit: Shutterstock, Marcus Aurelius Worth, Canaan logos, Nasdaq logos, Truthful Use, Wiki Commons, Canaan Class Motion Go well with, Enterprise Wire, Google Traits, and Pixabay.

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Jamie Redman

Jamie Redman is a monetary tech journalist dwelling in Florida. Redman has been an lively member of the cryptocurrency group since 2011. He has a ardour for Bitcoin, open supply code, and decentralized functions. Redman has written 1000’s of articles for in regards to the disruptive protocols rising at this time.

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