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Ebang International Holdings Inc. Class Action Lawsuit

Company Name
Ebang International Holdings Inc.
Stock Symbol
EBON
Class Period
June 26, 2020 to April 5, 2021
Motion Deadline
June 7, 2021
Court
Southern District of New York
20 days left to seek lead plaintiff status

Case Summary

The Ebang International Holdings Inc. class action lawsuit charges Ebang and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Ebang securities between June 26, 2020 and April 5, 2021, inclusive (the “Class Period”).  The Ebang class action lawsuit was commenced on April 8, 2021 in the Southern District of New York and is captioned Zaker v. Ebang International Holdings Inc., No. 21-cv-03060.

Ebang purports to be a leading application-specific integrated circuit chip design company and a leading manufacturer of Bitcoin mining machines.

The Ebang class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) the proceeds from Ebang’s public offerings had been directed to related parties rather than used to develop Ebang’s operations; (ii) Ebang’s sales were declining and Ebang had inflated reported sales, including through the sale of defective units; (iii) Ebang’s attempts to go public in Hong Kong had failed due to allegations of embezzling investor funds and inflated sales figures; (iv) Ebang’s purported cryptocurrency exchange was merely the purchase of an out-of-the-box crypto exchange; and (v) as a result, defendants’ positive statements about Ebang’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

On April 6, 2021, before the market opened, Hindenburg Research published a report alleging, among other things, that Ebang is directing proceeds from its initial public offering last year into a “series of opaque deals with insiders and questionable counterparties.”  According to the report, Ebang raised $21 million in November 2020, claiming the proceeds would go “primarily for development,” and that instead the funds were directed to repay related-party loans to a relative of Ebang’s Chief Executive Officer, Dong Hu.  The report also noted that Ebang’s earlier efforts to go public on the Hong Kong Stock Exchange had failed due to widespread media coverage of a sales inflation scheme with Yindou, a Chinese peer-to-peer online lending platform that defrauded 20,000 retail investors in 2018, with $655 million “vanish[ing] into thin air.”  On this news, Ebang’s share price fell approximately 13%.

Later that day after the market close, Ebang issued a statement representing that, though it believed the report “contain[ed] many errors, unsupported speculations and inaccurate interpretations of events,” the “Board, together with its Audit Committee, intends to further review and examine the allegations and misinformation therein and will take whatever necessary and appropriate actions may be required to protect the interest of its shareholders.”  On this news, Ebang’s share price fell an additional 2%, further damaging investors.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Ebang securities during the Class Period to seek appointment as lead plaintiff in the Ebang class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the Ebang class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Ebang class action lawsuit.  An investor’s ability to share in any potential future recovery of the Ebang action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Ebang class action lawsuit or have questions concerning your rights regarding the Ebang class action lawsuit, please provide your information here or contact counsel, J.C. Sanchez of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at jsanchez@rgrdlaw.com.  Lead plaintiff motions for the Ebang class action lawsuit must be filed with the court no later than June 7, 2021.

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 eight 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.

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