Bitcoin Mining Rig Manufacturer Canaan Sued – Accused of Misleading IPO Investors

Bitcoin Mining Rig Manufacturer Canaan Sued - Accused of Misleading IPO Investors

Bitcoin mining rig manufacturer Canaan Inc. is being sued for allegedly breaking U.S. securities laws before its initial public offering (IPO). Phillippe Lemieux, a Canaan investor, filed a class-action lawsuit that claims the company violated the Securities Act of 1933. Lemieux believes Canaan misled investors and the Securities and Exchange Commission (SEC) in regards to the company’s financial wellbeing.

Also Read: Bitcoin Cash Community Supports Greater Privacy by Donating Over 100 BCH to Cashfusion Fundraiser Canaan Gets Into Hot Water

In October 2018, the China-based mining rig company Canaan filed its IPO status with the SEC and the firm hoped to raise $400 million. However, Canaan only raised $90 million when it was listed on the Nasdaq Global Marketplace. In 2020 the mining giant’s IPO shares did not perform so well and the company also faced stiff competition from manufacturers like Bitmain, Microbt, and Innosilicon. Canaan and Nasdaq listed CAN via a November 2019 JOBS Act Initial Public Offering (IPO). “CAN’s auditor, PWC Zhong Tian LLP, gives us little additional comfort because the firm was charged by the SEC in 2012 for violating U.S. securities laws,” explains a recently published Marcus Aurelius Value report.

Now, according to a lawsuit filed by Scott+Scott Attorneys, Canaan is being sued by an investor who believes Canaan misled investors prior to the IPO sale. “Scott+Scott, a national securities and consumer rights litigation firm, is notifying investors that a class action lawsuit has been filed against Canaan, Inc. (NASDAQ: CAN), and certain other defendants, related to alleged violations of the Securities Act of 1933,” explains the law firm.

Reports note that the lawsuit against Canaan was invoked by the company’s investor Phillippe Lemieux who filed the class-action lawsuit on Wednesday. The filing stems from the District of Oregon and the legal team is looking for other Canaan investors to join the case. Not only does the lawsuit touch upon the grievances with Canaan, but the filing also mentions the IPO underwriters Citigroup Global Markets, China Renaissance Securities, Galaxy Digital, Huatai Financial Holdings, and CMB International Capital. Lemieux alleges that certain information was withheld concerning Canaan’s financial health and the lawsuit filing claims just before the IPO sale “numerous” distributors were removed from the Canaan website. Phillippe Lemieux filed the class-action lawsuit on Wednesday and alleged Canaan violated the Securities Act of 1933. The consumer rights litigation firm Scott+Scott’s filing stems from the District of Oregon and the plaintiff is demanding a trial. A Damning Marcus Aurelius Report

One specific violation Lemieux points out is when Canaan ostensibly partnered with Hangzhou Grandshores Weicheng Technology Co., Ltd. (Grandshores) for distribution purposes. Lemieux’s Grandshores evidence claims Canaan’s statements about this distribution alliance were “materially false and/or misleading because they misrepresented and/or failed to disclose the following adverse facts.” Canaan is considered the world’s second largest cryptocurrency mining equipment and application-specific integrated circuit (ASIC) manufacturer. The firm launched its initial public offering (IPO) with Nasdaq in Q4 2019 raising $90 million.

In addition to the Grandshores statements, Lemieux’s attorney cites a Marcus Aurelius Value research report that finds a significant amount of misleading statements. “Our research has uncovered a variety of irregularities and undisclosed dealings that lead us to believe CAN has deceived investors about its business,” the extremely critical Marcus Aurelius report discloses. A Google Trends screenshot from the Marcus Aurelius Value report. “We were troubled to discover that just one month before CAN’s NASDAQ IPO, a tiny Hong Kong stock named Grandshores (HK 1647) announced a purported “strategic partnership” with CAN,” the Marcus Aurelius Value report notes.

The filing in the District of Oregon notes that Lemieux is demanding a trial by jury. His attorneys are hoping a trial will end up in favor of the plaintiff and the other class members and seeks to be awarded damages. The litigation firm working for Lemieux says the claim is brought to the courts within one year after the discovery of “untrue statements and/or omissions in the [IPO] that should have been made and/or corrected through the exercise of reasonable diligence.” The lawsuit against Canaan is “therefore timely,” Scott+Scott’s court filing concludes. At the time of publication, NASDAQ: CAN is only $4.26 a share and is down 11.7% today. When news.Bitcoin.com first reported on Canaan’s shares on January 10, 2020, the stock was swapping for $6.49. This means shares are down 34.36% since our report and down 52.61% since the Canaan IPO first launched at $8.99 per share.

What do you think about the Chinese mining rig manufacturer Canaan being sued by an investor who claims Canaan misled investors before the IPO? Let us know what you think about this topic in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, or companies. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any ideas, software, mining rigs, mining rig manufacturers, websites, concepts, content, goods or services mentioned in this article. Price reports, market updates, and articles regarding stock prices are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.comnor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Canaan share (NASDAQ: CAN) prices referenced in this article were recorded on Friday, March 6, 2020, at 3:30 p.m. ET.

Image credits: Shutterstock, Marcus Aurelius Value,Canaan logos, Nasdaq logos, Fair Use, Wiki Commons, Canaan Class Action Suit, Business Wire, Google Trends, and Pixabay.

Did you know you can earn BTC and BCH through Bitcoin Mining? If you already own hardware, connect it to our powerfulBitcoin mining pool. If not, you can easily get started through one of our flexibleBitcoin cloud miningcontracts. Share this story: Tags in this story alleged violations, Avalon Miners, Avalonminers, Bitcoin Miners, Bitcoin mining, Bitcoin Mining Rigs, Bitmain, Canaan, canaan creative, Canaan Investor, Canaan Shares, Canaan Stock, China, China Renaissance Securities, chinese, Citigroup Global Markets, CMB International Capital, Galaxy Digital, Hangzhou Grandshores, Huatai Financial Holdings, Innosilicon, IPO sale, Lawsuit, Microbt, mining rig company, NASDAQ: CAN, Phillippe Lemieux, SEC, Securities Act of 1933, Securities and Exchange Commission, securities laws Related Bitcoin History: When DDoS Attacks Made BTC’s Price Drop NEWS | Kai Sedgwick

As anyone who has read the Bitcoin History series (or lived through the period in question) will know, the Bitcointalk… read more. Bitcoin Gold Whale Allegedly Controls Half the BTG Supply NEWS | Jamie Redman

According to a recent study, bitcoin gold (BTG) market prices are being manipulated by a single whale who holds a… read more. Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today. Please enable JavaScript to view the comments powered by Disqus.