The American law firm Bronstein, Gewirtz & Grossman notified investors about the filing of a class-action lawsuit against the Chinese mining company Ebang International Holdings.
The complaint is filed on behalf of Ebang shareholders who bought its shares between June 26, 2020 and April 5, 2021.
Lawyers accused the ASIC-miner manufacturer and some of its employees of securities-law violations and intend to recover losses investors sustained as a result.
The complaint alleges that during the period in question the defendants made false or misleading statements and failed to disclose that:
- The proceeds from the Ebang share placement were invested in the underwriter’s low-yield long-term bonds, rather than being directed to developing the business;
- sales were falling, and the firm overstated their volume, including through the sale of defective devices;
- The attempt by Ebang to list in Hong Kong was derailed by allegations of misappropriation of investor funds and inflated sales data;
- the launch of a crypto exchange was simply the purchase of a ready-made trading platform.
Bronstein, Gewirtz & Grossman said that investors could join the suit by June 7, 2021.
The filing followed the publication of a report by Hindenburg Research analysts, who suspected Ebang of misallocation of $374 million raised in four rounds after the IPO.
Earlier, a class-action against the Chinese company was filed in New York by the law firm Wolf Haldenstein Adler Freeman & Herz.
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