Pomerantz Law Firm Announces the Filing of a Class Action against MGT Capital Investments, Inc. and Certain Officers – MGTI
NEW YORK, Oct. 09, 2018 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against MGT Capital Investment, Inc. (“MGT Capital” or the “Company”) (OTCMKTS: MGTI) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and index under 18-cv-09228, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased publicly traded securities of MGT Capital from October 9, 2015 through September 7, 2018, both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by Defendants’ violations of federal securities laws and pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased MGT Capital securities between October 9, 2015, and September 7, 2018, both dates inclusive, you have until November 27, 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.
From 2013 until April 2016, MGT Capital described itself primarily as “engaged in the business of acquiring, developing and monetizing assets in the online and mobile gaming space as well as the social casino industry.” In May 2016, MGT Capital announced it was transforming itself into a cybersecurity company. MGT Capital currently purports to be engaged in bitcoin mining, with operations in the State of Washington and Sweden.
Starting in 2015, Barry Honig (“Honig”) and his associates chose MGT Capital to effectuate their modus operandi: buy cheap shares; obtain control over the company and its management; exercise that control in order to cause the company to engage in a misleading stock promotion that drives up the stock price and the trading volume of the company’s shares; and finally, dump their shares for a profit in the inflated market. Moreover, throughout the Class Period, Honig and his associate hid their control over the Company took numerous steps to conceal their involvement, and to perpetuate the false appearance that the Company was independent and controlled by its CEO.
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: (1) Defendants were engaged in an illegal pump-and-dump scheme to artificially inflate MGT Capital’s stock price; (2) the Scheme Defendants (defined below) had a history of engaging in illegal conduct in connection with the purchase and sale of securities; (3) the Scheme Defendants were a “group”, pursuant to Section 13 of the Exchange Act; (4) the Scheme Defendants exercised control over the Company; (5) the Company’s acquisition of D-Vasive Inc. was part of Defendants’ illegal pump-and-dump scheme to artificially inflate MGT Capital’s stock price; (6) Defendants’ illicit scheme caused MGT Capital to make false and misleading statements, which would result in governmental and regulatory scrutiny; (7) the scheme would result in the delisting of MGT Capital’s stock from NYSE MKT; and (8) as a result, Defendants’ statements about MGT Capital’s business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
Beginning in September 2016, when the Company disclosed that it had received a subpoena from the Securities and Exchange Commission (“SEC”) requesting “certain information from the Company,” the truth concerning the Company was solely revealed to the market—namely, that Defendants had controlled the Company in order to effectuate an illegal pump-and-dump scheme. The full extent of Defendants’ illegal acts was revealed on September 7, 2018, when the SEC issued a press release disclosing its recently filed complaint against the Scheme Defendants in connection with their actions concerning MGT Capital.
Following the SEC’s action against Honig and his associates, the Company’s stock plummeted to $0.395 per share on September 10, 2018, over 91% below the stock’s trading peak during the Class Period.
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