Longfin Under Investigation for Violation of Federal Securities Laws
Schubert Jonckheer & Kolbe LLP is investigating Longfin Corp. (“Longfin” or the “Company”) (NASDAQ:LFIN) for potential securities law violations. Investors who purchased Longfin securities in the Company’s December 2017 initial public offering (“IPO”) through April 2, 2018 may be affected.
On March 26, 2018, Citron Research reported that Longfin was “a pure stock scheme” and that its public statements “are riddled with inaccuracies and fraud.” On March 27, 2018, Bloomberg reported that the Company was being removed from the Russell 2000 Index, less than two weeks after joining. On this news, shares of Longfin fell by over $36 in two trading days.
On April 2, 2018 after the market closed, Longfin filed its Form 10-K Annual Report in which it disclosed that on March 5, 2018, “the Division of Enforcement of the SEC informed the Company that it is conducting an investigation In the Matter of Trading in the Securities of Longfin Corp. and requested that the Company provide certain documents in connection with its investigation, including documents related to the IPO and other financings and the acquisition of Ziddu.com.” Longfin closed on April 3rd at $9.89 per share, down over 90% from a high of over $142 on December 18, 2017.
On April 6, 2018, an SEC complaint against Longfin and three insiders was unsealed in the United States District Court for the Southern District of New York alleging violations of the federal securities laws, and the SEC obtained a court order freezing more than $27 million in trading proceeds from allegedly unlawful stock sales. The SEC complaint alleges that Longfin failed to make required SEC filings and that the defendants sold unregistered Longfin securities into the market. Also on April 6, 2018, NASDAQ halted trading of Longfin stock.
If you are a long term holder of Longfin stock and wish to obtain additional information—or would like to participate in a potential class action or shareholder derivative action—please complete the form below for a free legal consultation.