Robbins Arroyo LLP: MGT Capital Investments, Inc. (MGT) Misled Shareholders According to a Recently Filed Class Action
October 05 2016 - 7:29PM
Business Wire
Shareholder rights law firm Robbins Arroyo LLP announces that a
class action complaint was filed against MGT Capital Investments,
Inc. (NYSE MKT: MGT) in the U.S. District Court for the Southern
District of New York. The complaint is brought on behalf of all
purchasers of MGT securities between May 9, 2016 and September 20,
2016, for alleged violations of the Securities Exchange Act of 1934
by MGT's officers and directors. MGT, together with its
subsidiaries, acquires, develops, and monetizes assets in the
online, mobile, and casino gaming space.
View this information on the law firm's Shareholder Rights Blog:
www.robbinsarroyo.com/shareholders-rights-blog/mgt-capital-investments-inc
MGT Accused of Failing to Disclose Risks of Listing Its Stock
on the New York Stock Exchange ("NYSE")
According to the complaint, on May 9, 2016, MGT announced that
it was acquiring the assets of an internet security startup known
as D-Vasive, Inc. Under the terms of the acquisition, MGT would
purchase D-Vasive for $300,000 and 23.8 million shares of
newly-issued MGT stock, and cyber security pioneer and founder of
D-Vasive's controlling entity John McAfee would become the
Executive Chairman and Chief Executive Officer of MGT. MGT further
elaborated, "With the acquisition of D-Vasive technology as a
starting point, we expect to grow MGT into a successful and major
force in the space." MGT subsequently announced that it would also
acquire Demonsaw LLC, agreeing to issue another 20 million shares
of its common stock to acquire Demonsaw. As a result, MGT's stock
price surged more than 1,200% in the month following these
announcements.
However, the complaint alleges that MGT officials failed to
disclose the risks associated with listing new shares on the NYSE
and that MGT was under inquiry by the U.S. Securities and Exchange
Commission ("SEC"). On September 19, 2016, MGT revealed that it had
received a subpoena from the SEC days earlier which requested
certain undisclosed information. Then, on September 20, 2016, MGT
disclosed that the NYSE was refusing to list the 43.8 million
shares of MGT required to complete the acquisitions. On this news,
MGT stock fell 42%, closing at $1.89 per share on September 20,
2016.
MGT Shareholders Have Legal Options
Concerned shareholders who would like more information about
their rights and potential remedies can contact attorney Darnell R.
Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: http://www.businesswire.com/news/home/20161005006535/en/
Robbins Arroyo LLPDarnell R. Donahue619-525-3990 or Toll Free
800-350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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