NEW YORK, Jan. 13, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Silvergate Capital Corporation (NYSE: SI), NeoGenomics, Inc. (NASDAQ: NEO), Iris Energy Limited (NASDAQ: IREN), and NewAge, Inc. (OTC: NBEVQ). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Silvergate Capital Corporation (NYSE: SI)
Class Period: November 9, 2021 - January 5, 2023
Lead Plaintiff Deadline: February 6, 2023
Silvergate is a digital currency company. Its platform, the Silvergate Exchange Network (“SEN”), provides payments, lending, and funding solutions for an expanding class of digital currency companies and investors. Silvergate is also the parent company of Silvergate Bank which provides financial services that include commercial banking, commercial and residential real estate lending, mortgage warehouse lending, and commercial business lending.
On November 15, 2022, Marcus Aurelius Research tweeted that “Recently subpoenaed Silvergate bank records reveal $425 million in transfers from $SI crypto bank accounts to South American money launderers. Affadavit from investigation into crypto crime ring linked to smugglers/drug traffickers.”
On this news, the Company’s Class A common stock price fell $6.13, or 17%, to close at $29.36 per share on November 15, 2022, on unusually heavy trading volume.
On November 17, 2022, The Bear Cave newsletter released an article about several companies with potential exposure to recently collapsed cryptocurrency exchange FTX, including Silvergate. The article highlighted the connection linking Silvergate to a money laundering operation that transferred $425 million off cryptocurrency trading platforms.
On this news, the Company’s Class A common stock price fell $3.00, or 10.7%, to close at $24.90 per share on November 18, 2022, on unusually heavy trading volume.
Throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company’s platform lacked sufficient controls and procedures to detect instances of money laundering; (2) that Silvergate’s customers had engaged in money laundering in amounts exceeding $425 million; (3) that, as a result of the foregoing, the Company was reasonably likely to receive regulatory scrutiny and face damages, including penalties and reputational harm; and (4) that, as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
For more information on the Silvergate class action go to: https://bespc.com/cases/SI
NeoGenomics, Inc. (NASDAQ: NEO)
Class Period: February 27, 2020 - April 26, 2022
Lead Plaintiff Deadline: February 6, 2023
NeoGenomics provides cancer tests and testing services to doctors, clinics, hospitals, and pharmaceutical companies. Among the Company’s portfolio of tests are next generation sequencing (“NGS”) tests. NGS tests have become popular with pathologists in recent years because they can test multiple genes of a cancer simultaneously, making them more cost effective and efficient than older legacy tests that only look for a single specific genetic mutation.
Throughout the Class Period, NeoGenomics consistently misrepresented to investors that it had a “comprehensive menu” of cancer tests that positioned it as a “one-stop-shop” for pathologists that needed cancer testing. Moreover, the Company stated that it had “every kind of testing modality that you can use for cancer, including some of the fast-growing new ones, like next-generation sequencing,” and had “a competitive advantage” as a “go-to reference lab with a comprehensive menu for just about any kind of tests that you want to have done in cancer [] and we keep our test menu very advanced.”
NeoGenomics also consistently asserted during the Class Period that it could “leverage” the supposedly “fixed cost” structure of its business to improve profitability as revenue increased. NeoGenomics also repeatedly touted its “robust Compliance Program . . . overseen by our Board of Directors . . . to ensure compliance with the myriad of . . . laws, regulations and governmental guidance applicable to our business,” merely listing failure to comply among the many hypothetical risks that could impact the Company’s results.
These statements were materially false and misleading. In truth: (i) NeoGenomics was anything but a “one-stop-shop” for cancer testing because it did not offer the most technologically advanced NGS tests, which led to a significant decrease in revenue as current and prospective customers went elsewhere for their testing needs; (ii) the Company’s costs were not fixed because NeoGenomics needed to hire additional employees to process more complex customized testing demanded by customers utilizing the Company’s outdated portfolio of tests, leading to operational challenges, decreased lab efficiency, and increased testing turnaround times; and (iii) NeoGenomics violated federal healthcare laws and regulations related to fraud, waste, and abuse.
On November 4, 2021, NeoGenomics revealed that it was, “conducting an internal investigation with the assistance of outside counsel that focuses on the compliance of certain consulting and service agreements with federal healthcare laws and regulations” and had recently “notified the Office of the Inspector General of the U.S. Department of Health and Human Services of our investigation.” Additionally, the Company disclosed that it “accrued a reserve of $10.5 million for potential damage and liabilities associated with the federal healthcare program revenue received spanning multiple years.” On this news, the price of NeoGenomics common stock fell $8.18 per share, or 17.6%, from $46.53 per share on November 3, 2021 to $38.35 per share at the close of trading on November 4, 2021.
After the close of trading on November 4, 2021, NeoGenomics provided some limited additional details about the internal investigation, specifically that the “federal healthcare laws and regulations” at the center of the Company’s investigation “include those relating to fraud, waste and abuse.”
On March 28, 2022, NeoGenomics disclosed that “the Board of Directors and Mark Mallon, Chief Executive Officer, have agreed that Mr. Mallon will step down as CEO and member of the Board, effective immediately.” At the same time, the Company disclosed that it “currently expects revenue for Q1 2022 may be below the low end of its prior guidance of $118 - $120 million and EBITDA for Q1 2022 will be below the low end of its prior guidance of $(15) - $(12) million. The larger than anticipated EBITDA loss was primarily driven by higher than anticipated Clinical Services cost of goods sold. The Company intends to take immediate action to address performance and costs . . . Additionally, the Company has withdrawn its 2022 annual financial guidance issued February 23, 2022.” On this news, the price of NeoGenomics common stock fell $5.30 per share, or 29.8%, from $17.79 per share on March 28, 2022 to $12.49 per share at the close of trading on March 29, 2022.
Then, on April 27, 2022, NeoGenomics reported its first-quarter 2022 financial results including that revenue for the quarter was $117 million and EBITDA loss was $19 million, that “[c]onsolidated gross profit for the first quarter of 2022” had “decrease[d] 8.0% compared to the first quarter of 2021,” and that “[o]perating expenses increased by $34 million, or 59%, compared to the first quarter of 2021.” The Company explained that “higher payroll and payroll related costs to support the Company’s strategic growth initiatives” drove the decreased profit and increased operating expenses.
Also on April 27, 2022, NeoGenomics held a conference call to discuss its firstquarter 2022 results (the “1Q22 Earnings Call”). During the 1Q22 Earnings Call, the Company attributed its poor performance in substantial part to the fact that, “our test mix is weighted to legacy modalities and disease-specific NGS offerings, while the market is moving towards larger, more comprehensive panels” and “we’ve seen a notable decrease in lab efficiency over the course of the past year . . . largely attributable to increased complexity of both our product offerings and our lab processes, due in part to efforts to respond to customer requests for customization.” NeoGenomics further disclosed that it was “seeing increased competition on the NGS front as panels move or as customers move to demanding larger, more comprehensive NGS-only panels, and our offering is more oriented towards smaller targeted panels” and that the Company was “seeing bigger and bigger panels coming from some of these emerging companies . . . where we have not kept up.”
On this news, the price of NeoGenomics common stock fell $0.41 per share, or 3.8%, from $10.85 per share on April 26, 2022 to $10.44 per share at the close of trading on April 27, 2022.
For more information on the NeoGenomics class action go to: https://bespc.com/cases/NEO
Iris Energy Limited (NASDAQ: IREN)
Class Period: November 17, 2021 - November 1, 2022
Lead Plaintiff Deadline: February 13, 2023
Iris touts itself as a leading owner and operator of institutional-grade, highly efficient, proprietary Bitcoin mining data centers powered by 100% renewable energy.
Iris’s Bitcoin mining operations purportedly generate revenue by earning Bitcoin through a combination of block rewards and transaction fees from the operation of specialized computing equipment called “miners” or “Bitcoin miners” and exchanging these Bitcoin for fiat currencies such as U.S. dollars (“USD”) or Canadian dollars (“CAD”) on a daily basis.
Iris has three wholly-owned special purpose vehicles, referred to as “Non-Recourse SPV 1”, “Non-Recourse SPV 2”, and “Non-Recourse SPV 3” (collectively, the “Non-Recourse SPVs”), each of which was incorporated for the specific purpose of financing certain of the Bitcoin miners operated by the Company.
On October 25, 2021, Iris filed a registration statement on Form F-1 with the SEC in connection with the IPO, which, after several amendments, was declared effective by the SEC on November 16, 2021 (the “Registration Statement”).
On or about November 17, 2021, Iris conducted the IPO, issuing approximately 8.27 million of its ordinary shares to the public at the Offering price of $28 per ordinary share for approximate proceeds to the Company of $215 million, before expenses, and after applicable underwriting discounts and commissions.
On November 18, 2021, Iris filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the “Prospectus” and, together with the Registration Statement, the “Offering Documents”).
The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) certain of Iris’s Bitcoin miners, owned through its Non-Recourse SPVs, were unlikely to produce sufficient cash flow to service their respective debt financing obligations; (ii) accordingly, Iris’s use of equipment financing agreements to procure Bitcoin miners was not as sustainable as Defendants had represented; (iii) the foregoing was likely to have a material negative impact on the Company’s business, operations, and financial condition; and (iv) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.
On November 2, 2022, Iris issued a press release disclosing, among other things, that “[c]ertain equipment (i.e., Bitcoin miners) owned by [NonRecourse SPV 2 and Non-Recourse SPV 3] currently produce insufficient cash flow to service their respective debt financing obligations, and have a current market value well below the principal amount of the relevant loans” and that “[r]estructuring discussions with the lender remain ongoing.”
On this news, Iris’s ordinary share price fell $0.51 per share, or 15.04%, to close at $2.88 per share on November 2, 2022—a nearly 90% decline from the Offering price.
As of the time this Complaint was filed, Iris’s ordinary shares continue to trade significantly below the $28 per share Offering price, damaging investors.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Iris class action go to: https://bespc.com/cases/IREN
NewAge, Inc. (OTC: NBEVQ)
Class Period: January 18, 2018 - October 18, 2022
Lead Plaintiff Deadline: February 6, 2023
On January 10, 2022, NewAge filed an 8-K announcing that the Board and Defendant Willis agreed that he would “resign as [CEO], Director, and employee of the Company, effective immediately. The Company and Mr. Willis will determine the terms of his departure at a future date. [. . .] Ed Brennan will provide additional guidance and direction to the senior management team [. . .].” In response, the stock went down 6% on each of the following trading days, from an opening price of $0.98 to a closing price of $0.9251 on January 11 and from an opening price of $0.935 to a closing price of $0.88 on January 12.
On May 17, 2022, the Company announced after trading hours had concluded that it had received a late notice from Nasdaq regarding the filing of its Form 10-Q. The next day, the stock went down by 8%, from an opening price of $0.391 per share to $0.3591 per share.
On June 8, 2022, after trading had concluded for the day, the Company announced that it was undertaking a review of “strategic alternatives,” including “available financing alternatives, a potential financial restructuring, merger, sale or other strategic transaction.” The next day, NewAge’s share price went down 12%, from $0.42 per share to $0.3703. Following that, the Company’s share price closed down 11% (the price per share dropped from $0.3605 to $0.3201 on the day), 5% (the price per share dropped from ($0.3112 per share to $0.2902 on the day), and 3% (the price per share dropped from $0.298 per share to $0.29 on the day), respectively.
On August 30, 2022, NewAge announced that it was filing for Chapter 11 bankruptcy relief. Further, On August 31, 2022, The Wall Street Journal released an article called “New Age Says Cost of Internal Probe Contributed to Bankruptcy,” which highlighted the fact that in its Chapter 11 disclosure, NewAge admitted that it had conducted an expensive internal investigation into Ariix for suspected violations of the FCPA. The next day, the stock closed down 39%, from an opening price of $0.2016 per share to $0.1222 per share. It further plummeted on September 2, 2022, closing down 27%, from an opening of $0.20 per share to $0.1482.
On September 2, 2022, after trading hours in the domestic markets had finished for the day, NewAge filed an 8-K announcing that it had received writing notice from The Nasdaq Stock Market LLC (“Nasdaq”) that, as a result of its filing for protection under Chapter 11 of the U.S. Bankruptcy Code, Nasdaq determined that NewAge’s securities would be delisted from the Nasdaq stock exchange, beginning on September 8, 2022. In response to this news, NewAge stock closed down 9% on September 6, 2022, from an opening price of $0.1368 to a closing price of $0.125.
On October 18, 2022, the SEC announced that it was taking legal action against Defendant Willis. Specifically, he was alleged to have engaged in a “multi-year fraud by disseminating numerous false and misleading press releases and making false public statements concerning NewAge’s business dealings, and aided and abetted NewAge’s disclosure of material information in violation of Regulation FD,” and was accordingly charged under Section 10(b) and corresponding Rule 10b-5 of the Exchange Act, Section 17(a) of the Securities Act, and with aiding and abetting NewAge’s violations of Section 13(a) of the Exchange Act and Regulation FD.
On October 19, 2022, the SEC announced that it had instituted cease-and-desist proceedings against NewAge pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, enjoining NewAge from further violations of the Securities and Exchange Acts, and rules and regulations promulgated under them. In anticipation of these proceedings, NewAge submitted a settlement offer, which the SEC has accepted. The next day, NewAge stock plummeted from an opening price of $0.175 per share to $0.0013 per share, or 93%.
The facts constituting scienter were not known to any reasonable investor until announcements of these SEC proceedings in October 2022.
For more information on the NewAge class action go to: https://bespc.com/cases/NBEVQ
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
