A class-action lawsuit filed against Canaan Creative

by in Blockchain News

Canaan mining

Rosen Law Firm filed a class-action lawsuit against Canaan Creative on account of buyers of its securities. The manufacturer of bitcoin miners was accused of manipulating information during an IPO.

According to a press release, investors intend to recover from Canaan Creative losses incurred after the purchase of shares in the company during the IPO.

The corporation held an initial public offering on NASDAQ in October. Investors bought 10 million American Depositary Receipts (ADS) for $9. Gathered $90 million met minimum expectations, although Canaan had previously planned to receive $400 million during the IPO.

Already in December, stock prices fell off the IPO level by 40%, in mid-February, the decline reached 50%. Following Canaan securities unexpectedly rose to $ 8, but again collapsed. Now they are trading at $ 4.8 per ADS.

The Chinese firm was accused of submitting false information during an IPO and violation of securities laws.

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The lawsuit states:

  • Canaan's announced “strategic partnership” turned out to be fictitious;
  • The organization overestimated the real financial indicators;
  • Many distributors, mostly small and shady companies, were excluded from the Canaan website before the IPO;
  • Some of the claimed large regular customers had nothing to do with the blockchain industry and could hardly be such.

Rosen called on investors to join the class-action lawsuit. The law firm also clarified that the lead plaintiff (who will represent everyone in court) has not yet been selected.