WHAT IS THE RIOT BLOCKCHAIN LEGAL INVESTIGATION ABOUT?
We are investigating whether losses suffered by Riot Blockchain Inc. (Nasdaq: RIOT) investors are recoverable pursuant to securities laws. RIOT’s stock price collapsed 33% on February 16, 2018, after CNBC raised a number of troubling issues, including whether RIOT’s recent name change had to do with its underlying business or was a ploy to mislead investors into believing it was involved with “blockchain”, the technology underpinning cryptocurrencies like Bitcoin.
CNBC RAISES TROUBLING QUESTIONS
CNBC’s investigative report on February 16, 2018, and RIOT’s denial of any wrongdoing, are set out in this link from CNBC:
The CNBC report raises the following red flags:
- Does the company have a real underlying blockchain business, or is developing one, or is it simply trying to cash-in by making investors think they do by changing their name? The name change caused RIOT’s stock price to skyrocket from $8 to $40 per share.
- Barry Honig, a big shareholder that owned 11% of RIOT stock sold shares soon after the name change.
- RIOT’s CEO, John O’Rourke, sold $869,000 worth of shares in December 2017, after RIOT’s stock price spiked.
- CNBC suggests that Barry Honig’s is the real shot-caller at RIOT, detailing a timeline that shows Honig nominating and supporting O’Rourke to be CEO of RIOT’S predecessor company.
- Trying to visit Honig at his office, CNBC reporters found O’Rourke there instead.
- The company paid $11 million for a company with cryptocurrency mining equipment assets that are only worth $2 million. CNBC also raises.
The company twice postponed an annual shareholder meeting supposedly to be held at a luxury resort in Boca Raton Florida. CNBC claims resort employees had no record of such meetings having been booked.
RIOT STOCK PLUMMETS
The disclosures in the CNBC report caused the stock to drop 33%, falling from $17.2 per share to $11.50 per share on almost double the normal trading volume.
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