NEW YORK, NY / ACCESSWIRE / October 14, 2016 / Pomerantz LLP announces that a class action lawsuit has been filed against MGT Capital Investments, Inc. (“MGT” or the “Company”) (NYSE MKT: MGT) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-07449, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired MGT securities between May 9, 2016 and September 20, 2016 both dates inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased MGT securities during the Class Period, you have until November 21, 2016 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
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MGT, together with its subsidiaries, purports to acquire, develop, and monetize assets in the online, mobile, and casino gaming space. The Company operates through two segments, Gaming and Intellectual Property.
On May 9, 2016, MGT announced that it had entered into a definitive asset purchase agreement to acquire certain assets and technology from D-Vasive Inc. (“D-Vasive”), a provider of anti-spy software (the “D-Vasive Transaction”). In conjunction with the transaction, MGT announced the proposed appointment of Defendant John McAfee (“McAfee”) as the Company’s Executive Chairman and Chief Executive Officer (“CEO”), and that the Company intended to change its corporate name to John McAfee Global Technologies, Inc. MGT further advised investors that “[m]ajor terms of the deal include the payment to D-Vasive Inc. stockholders of 23.8 million restricted shares of MGT stock and $300,000 in cash. The proposed share issuance is expected to amount to roughly 47% of the Company on a pro-forma diluted basis at closing.”
On May 26, 2016, MGT announced that it had entered into a definitive asset purchase agreement to acquire certain technology and assets from Demonsaw LLC (“Demonsaw”), which the Company touted as “a provider of a secure and anonymous file sharing software platform.” MGT further advised investors that “[m]ajor terms of the deal include the payment to Demonsaw LLC members of 20.0 million restricted shares of MGT common stock. The proposed share issuance is expected to amount to approximately 28% of the Company’s common stock on a pro-forma fully diluted basis at closing, inclusive of shares of common stock to be issued in connection with the Company’s previously announced transaction with D-Vasive, Inc.” The Company and D-Vasive would subsequently arrange for D-Vasive to purchase Demonsaw in advance of the D-Vasive Transaction, “in order to simplify these transactions, and meet certain customary tax issues,” so that MGT would acquire Demonsaw’s assets as well as D-Vasive’s via the D-Vasive Transaction.
On September 9, 2016, MGT announced that at the Company’s 2016 Annual Meeting of Stockholders, its stockholders had approved, inter alia, the issuance of a total of 43.8 million shares of common stock in connection with the D-Vasive Transaction.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the NYSE was unlikely to approve the listing of the 43.8 million additional shares that the Company was required to issue to consummate the D-Vasive Transaction; and (ii) as a result of the foregoing, MGT’s public statements were materially false and misleading at all relevant times.
On September 19, 2016, pre-market, MGT announced that on September 15, 2016, the Company received a subpoena from the U.S. Securities and Exchange Commission (“SEC”) requesting certain information from the Company. MGT stated that it had no reason to believe that the Company is or will be the subject of any enforcement proceedings and was fully cooperating to comply with the SEC’s request.
On this news, MGT stock fell $0.74, or 22.7%, to close at $2.52 on September 19, 2016.
Then, on September 20, 2016, pre-market, MGT announced that the NYSE had informed the Company on September 19, 2016 that it would “not approve the listing on the Exchange of the 43.8 million shares that the Company is required to issue in order to complete the closing of the D-Vassive [sic] merger,” and that “[t]he Company and John McAfee remain committed to closing the transaction and are exploring alternatives.”
On this news, MGT stock fell $0.63, or 25%, to close at $1.89 on September 20, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
SOURCE: Pomerantz LLP