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New York-based firm Pomerantz LLP has initiated an investigation against Core Scientific over concerns that its executives were involved in securities fraud and activities that affected its stock price negatively.
The securities class action firm said it was investigating the claims made by Culper Research in its 2022 report on behalf of investors of Core Scientific.
According to Culper Research, Core Scientific “widely oversold” its mining and hosting business in 2021 and failed to protect the interest of minority shareholders.
The bankrupt bitcoin miner had allegedly waived the 180-day lockup for over 282 million shares. The neglect made it easier for the shares to be dumped within 5 trading days. As a result, its stock price fell by 9.4% to close at $6.98 on March 3, 2022.
In another case filed by Celsius Network, Core Scientific was accused of knowingly adding false fees and breaching its contractual obligations. The news of the lawsuit caused Core Scientific’s stock to fall 10.3% to close at $1.30 per share on September 29, 2022.
In addition, Core Scientific shares reportedly lost over 78% of their price on Oct. 27 after the bitcoin miner announced plans to halt operations over its liquidity crisis.
The struggling bitcoin miner had over $1.3 billion in debt before it filed for bankruptcy on Dec. 21.
Pomerantz LLP has called on investors affected by Core Scientific’s bankruptcy to investigate the claims and join the possible class action.
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