Cronos Group Inc. Class Action Lawsuit
- Company Name
- Cronos Group Inc.
- Stock Symbol
- Class Period
- May 9, 2019 to March 2, 2020
- Eastern District of New York
The Cronos Group Inc. securities class action lawsuit charges Cronos and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Cronos securities between May 9, 2019 and March 2, 2020 (the “Class Period”). The Cronos securities class action lawsuit was commenced on March 11, 2020 in the Eastern District of New York and is captioned Witte v. Cronos Group Inc., No. 20-cv-01310.
Cronos is a global cannabinoid company with international production and distribution across five continents. Cronos is committed to building intellectual property by advancing cannabis research, technology and product development. Cronos’s brand portfolio includes PEACE NATURALS™, a global health and wellness platform, two adult-use brands, COVE™ and Spinach™, and two hemp-derived CBD brands, Lord Jones™ and PEACE+™.
The Cronos securities class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding Cronos’s business and operations. Specifically, defendants failed to disclose that Cronos had inappropriately recognized revenue on a significant number of transactions, which would foreseeably necessitate reviews that would delay Cronos’s ability to timely file its periodic reports. As a result of this information being withheld from the market, Cronos securities traded at artificially inflated prices during the Class Period, with the price of Cronos’s shares reaching a high of more than $17 per share.
On February 24, 2020, Cronos stated that it would delay its fourth quarter and fiscal year 2019 earnings release and conference call, previously scheduled for February 27, 2020, which caused a nearly 11% decline in the price of Cronos shares.
Then, on March 2, 2020, Cronos disclosed that it had requested a 15-day extension from the U.S. Securities and Exchange Commission to file its annual report on Form 10-K for the fourth quarter and fiscal year 2019. Cronos attributed the delay to a “review by the Audit Committee of Cronos’s Board of Directors, with the assistance of outside counsel and forensic accountants, of several bulk resin purchases and sales of products through the wholesale channel and the appropriateness of the recognition of revenue from those transactions.” On this news, the price of Cronos shares fell more than 11% to close at $5.32 per share on March 3, 2020.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.