A class action suit has been filed against Riot Blockchain for alleged violations of federal securities rules.
A class action suit against Riot Blockchain (formerly Bioptix) was filed in a Colorado district court on Thursday, seeking unspecified damages for alleged violations of federal securities laws.
Law firm Pomerantz is leading the charge on behalf of investors who bought Riot’s securities between October 4, 2017 and February 15, 2018. Shareholders joining the register during the specified period have until April 18, 2018 to ask the court to appoint them as one of the lead plaintiffs.
Pomerantz said in a statement:
“The complaint alleges that throughout the class period, defendants made materially false and misleading statements regarding the company’s business, operational and compliance policies… As a result of the foregoing, Riot shares traded at artificially inflated prices during the class period, and class members suffered significant losses and damages.”
The law firm cited a media report saying that Riot did not have “meaningful involvement in the cryptocurrency business” despite its stock shooting “from $8 a share to more than $40, as investors wanted to cash in on the craze of all things crypto.”
From Bioptix to Riot
Early in October 2017, publicly traded Bioptix changed its name to Riot Blockchain to reflect its shift in business direction. It came at a time when Bitcoin and cryptocurrencies were starting to gain significant investor attention. Incorporating the word “blockchain” in the firm’s company name immediately resulted in a more than 20% surge in its stock value.
Chief executive officer Michael Beeghley said at the time:
“At Riot Blockchain, our team has the insight and network to effectively grow and develop blockchain assets. With new applications being developed for blockchain every day, this is a rapidly growing and evolving market.”
Dennis Gartman lost on Riot
Legendary Bitcoin skeptic Dennis Gartman, author of the famous Gartman Newsletter, admitted on Tuesday that he had lost money investing in Riot Blockchain, adding that even the savviest investor could sometimes “screw up” in the crypto craze.
Without blaming Riot for his losses, Gartman stated that he was still smarting from “having broken our own primary rule of trading to never, ever add to a losing position.”
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