Zion Oil & Gas, Inc.
- Company Name
- Zion Oil & Gas, Inc.
- Stock Symbol
- Class Period
- March 12, 2018 to July 10, 2018
- Motion Deadline
- October 8, 2018
- Northern District of Texas
The complaint charges Zion and certain of its officers with violations of the Securities Exchange Act of 1934. Zion operates as an oil and gas exploration company in Israel. Zion currently holds one active petroleum exploration license in Israel, the Megiddo-Jezreel License, comprising approximately 99,000 acres.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects, including that Zion was or was soon likely to become the subject of an SEC investigation. As a result of this information being concealed from investors, Zion securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $5.50 per share.
On May 30, 2018, Probes Reporter published a report entitled “New Data Confirms SEC Investigation at Zion Oil & Gas.” According to the report, despite conflicting Freedom of Information Act (“FOIA”) responses and a public denial by Zion, a FOIA appeal response confirmed there were “on-going SEC enforcement proceedings” at Zion. In a Twitter post the same day, Zion unequivocally denied the existence of an investigation, stating that [t]here is no SEC investigation into Zion Oil & Gas, Inc.,” and advising investors to “[j]ust ignore such distortions.” Later that same day, in a second Twitter post, Zion told investors to “[a]rm yourself with good information and how to spot false rumors” and included a link to an article about short-selling and stock manipulation.
Then on July 11, 2018, Zion disclosed that the Company had, in fact, received a subpoena to produce documents from the Fort Worth office of the SEC, informing Zion of the existence of a non-public, fact-finding inquiry into the Company. Zion advised investors that its “response to the subpoena will necessarily entail significant costs and management’s attention.” On this news, the price of Zion common stock fell $0.44 per share, or 11%, to close at $3.56 per share on July 12, 2018.