At the end of April, Freda Wolfson of the U.S. District Court of New Jersey made the decision to dismiss the case against the Riot Blockchain. According to the lawsuit, the Colorado-based firm decided to change its name as the firm tried to boost its share price.
Several years ago, more precisely in October 2017, Riot Blockchain changed its name from Bioptix. This decision followed the announcement that it decided to move from biotechnology into Bitcoin mining. Interestingly, the share price jumped from $8 to $38 by December 2017.
It is worth mentioning that, the original complaint dates back to February 2018, when the price fell to $10. Investors argued that the company misled them by capitalizing on public interest in blockchain to increase the price of its shares.
Riot Blockchain vs investors
Let’s have a look at this lawsuit to learn more about this case. Last month, Wolfson dismissed complaints against Riot Blockchain, its CEO John O’Rourke as well as former CEO Michael Beeghley and Chairman Jeffery G. McGonegal.
According to the U.S. court, plaintiffs failed to prove that the Colorado-based firm changed its name to increase the price of its shares.
Moreover, complaints against several other people connected with Riot Blockchain were also dismissed. The judge dismissed the complaints against the directors Andrew Kaplan, as well as Jason Les, and Eric So.
Also, investors filed complaints against employees of Riot Blockchain, Catherine DeFrancesco, Mike Dai. Moreover, private investors Barry Honig, John Stetson, and Martin Groussman for their alleged involvement. However, a New Jersey judge dismissed complaints against all of them.
In February 2020, the Securities and Exchange Commission (SEC) told Riot Blockchain, was dropping its investigation regarding the securities fraud.
Importantly, the plaintiffs have the ability to file a request to produce an amended complaint within 30 days.
Also, at the end of April, Riot Blockchain announced the purchase of 1,000 Bitmain mining rigs.