Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Riot Blockchain faces two investor suits claiming the company’s October 2017 name change was done to drive up stock prices, even though the firm lacked substantive cryptocurrency investments.
Riot Blockchain Inc., formerly Bioptix Inc., used its name change to attract cryptocurrency investors despite not having a meaningful cryptocurrency business plan, according to the two complaints, one filed Feb. 22 in the U.S. District Court for the District of Colorado and the other filed Feb. 17 in the U.S. District Court for the District of New Jersey.
Riot Blockchain focused on animal health and veterinary products prior to its name change, the complaints said.
The investors sued after a CNBC investigation revealed Riot Blockchain wasn’t meaningfully involved in the cryptocurrency business, despite its name change and resulting fourfold increase in price per share, according to the complaints. The company’s stock dropped 33.37 percent after the story’s publication.
The company twice canceled its annual stockholder meeting and never intended to actually hold it, the complaints said.
Riot Blockchain representatives didn’t immediately respond to requests for comment. The company’s CEO, John O’Rourke, called the story that spawned the complaints “a garbage, biased hit piece,” according to a Bloomberg report. Riot Blockchain cited its ownership of cryptocurrency mining machines and investment in a Canadian digital currency exchange in a release responding to the CNBC story.
Securities and Exchange Commission Chairman Jay Clayton in January 2018 warned companies against securities sales related to blockchain name changes when they had “no meaningful track record in pursuing the commercialization of distributed ledger or blockchain technology.”
The cases are Greenawalt v. Riot Blockchain Inc. , D. Colo., No. 1:18-cv-00440, complaint filed 2/22/18 and Takata v. Riot Blockchain Inc. , D.N.J., No. 3:18-cv-02293, complaint filed 2/17/18 .
To contact the reporter on this story: Jennifer Bennett in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Seth Stern at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)