A second securities lawsuit has been filed against Alliance MMA for claims that it misled investors. The new lawsuit filed May 3rd is in the United States District Court for the Southern District of New York and seeks class action status.
The lawsuit arises out of an amendment made by the company which trades on the NASDAQ. In an 8-K filing made by the company last month, it stated that financial statements previously made for the nine months ended September 30, 2016 included in the Company’s Form 10-Q, three months ending June 30, 2016 and six months ending June 30, 2016 could no longer be relied upon because of an error in recognizing as compensation transfers of common stock by an affiliate of the Company to “individuals who were at the time of transfer, or subsequently became, officers, directors or consultants of the Company.”
The Complaint filed by plaintiff David Shulman states that Alliance MMA completed its IPO that consisted public sale of 2,222,308 shares of the Company’s common stock at $4.50 per share. According to a Declaration from the Plaintiff filed with the Complaint, he purchased 100 shares of Alliance MMA on October 16, 2016 for $3.99 per share.
As of this writing on Tuesday, May 9, 2017, the stock is trading around $1.53 per share.
A Second Alliance MMA Lawsuit by JASONCRUZ206 on Scribd
Certification of Plaintiff in Second Alliance MMA Lawsuit by JASONCRUZ206 on Scribd
Payout Perspective:
The lawsuit is similar to the one filed in New Jersey last month. One might expect a similar response from Alliance MMA in that it has retained a law firm to defend itself against these allegations. With an issue like this, it is expected that Plaintiff attorneys smell blood in the water and search for investors that may have been harmed from the misstatements made by the Company. MMA Payout will continue to follow the situation.
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