The Law Offices of Frank R. Cruz Files a Securities Class Action Lawsuit Against SCWorx Corp. (WORX)
May 06 2020 - 12:15PM
Business Wire
Shareholders with $50,000 in losses or more are encouraged to
contact the firm.
The Law Offices of Frank R. Cruz announces that it has filed a
class action lawsuit in the United States District Court for the
Southern District of New York captioned Yannes v. SCWorx Corp., et
al., (Case No. 20-cv-03349) on behalf of persons and entities that
purchased or otherwise acquired SCWorx Corp. (“SCWorx” or the
“Company”) (NASDAQ: WORX) securities between April 13, 2020 and
April 17, 2020, inclusive (the “Class Period”). Plaintiff
pursues claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 (the “Exchange Act”). SCWorx investors have
until June 29, 2020 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to
participate.
On April 13, 2020, before the market opened, SCWorx announced
that it had received a committed purchase order of two million
COVID-19 rapid testing kits, “with provision for additional weekly
orders of 2 million units for 23 weeks, valued at $35M per
week.”
On this news, the Company’s share price increased by $9.77, to
close at $12.02 per share on April 13, 2020.
On April 17, 2020, Hindenburg Research issued a report doubting
the validity of the deal, calling it “completely bogus.” Hindenburg
Research alleged that the COVID-19 test supplier that SCWorx is
buying from, Promedical, has a Chief Executive Officer “who
formerly ran another business accused of defrauding its investors
and customers” and “was also alleged to have falsified his medical
credentials.” According to the report, Promedical claimed to the
FDA and regulators in Australia to be offering COVID-19 test kits
manufactured by Wondfo, but Wondfo “disavowed any relationship” and
the buyer that SCWorx claimed to have lined up does not appear to
be “capable of handling hundreds of millions of dollars in
orders.”
On this news, the Company’s share price fell $1.19, or more than
17%, over three consecutive trading sessions to close at $5.76 per
share on April 21, 2020, on unusually heavy trading volume.
On April 22, 2020, the SEC halted trading of the Company’s
stock.
The complaint filed in this class action alleges that 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 SCWorx’s supplier for COVID-19 tests had
previously misrepresented its operations; (2) that SCWorx’s buyer
was a small company that was unlikely to adequately support the
purported volume of orders for COVID-19 tests; (3) that, as a
result, the Company’s purchase order for COVID-19 tests had been
overstated or entirely fabricated; and (4) that, as a result of the
foregoing, Defendants’ positive statements about the Company’s
business, operations, and prospects, were materially misleading
and/or lacked a reasonable basis. Follow us for updates on Twitter:
twitter.com/FRC_LAW.
If you purchased SCWorx securities during the Class Period, you
may move the Court no later than June 29, 2020 to ask the
Court to appoint you as lead plaintiff. To be a member of the Class
you need not take any action at this time; you may retain counsel
of your choice or take no action and remain an absent member of the
Class. If you purchased SCWorx securities, have information or
would like to learn more about these claims, or have any questions
concerning this announcement or your rights or interests with
respect to these matters, please contact Frank R. Cruz, of The Law
Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los
Angeles, California 90067 at 310-914-5007, by email to
info@frankcruzlaw.com, or visit our website at
www.frankcruzlaw.com. If you inquire by email please include your
mailing address, telephone number, and number of shares
purchased.
This press release may be considered Attorney Advertising in
some jurisdictions under the applicable law and ethical rules.
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version on businesswire.com: https://www.businesswire.com/news/home/20200506005324/en/
The Law Offices of Frank R. Cruz, Los Angeles Frank R. Cruz,
310-914-5007 fcruz@frankcruzlaw.com www.frankcruzlaw.com
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