Class Action lawsuit filed against DryShips connected to its transactions with BVI company

A class action lawsuit has been filed against Dryships Inc. and some of its officers, according to Pomerantz Law Firm and Stull, Stull & Brody. The class action is on behalf of investors who acquired DryShips securities between June 8, 2016, and July 12, 2017, and seek to recover damages caused by defendants’ violations of the Securities Exchange Act of 1934. The Complaint alleges that the defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies.

In a number of transactions that started on or about June 8, 2016, the ocean going cargo operator raised hundreds of millions of dollars in capital by selling newly-issued shares directly to the BVI-registered company Kalani Investments Ltd., at a discounted price. This capital allowed DryShips to almost double the size of its fleet to 36 vessels. Kalani ultimately acquired securities convertible to more than $626 million in DryShips common stock, roughly 100 times DryShips’ stock market value as of early November 2016. Meanwhile, to counter share-value dilution and avoid NASDAQ delisting, DryShips executed a series of reverse stock splits. Since November 2016, DryShips’ share price has fallen approximately 99.9%.

Comments are closed.