Ebang purports to be a leading application-specific integrated circuit chip design company and a leading manufacturer of Bitcoin mining machines. 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 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.
If you suffered a loss on your investments or would like to inquire about joining an action to recover your loss under the federal securities laws, please complete the form below.
An attorney will contact you at no cost to provide you information about joining the action and answer your questions. Please note that submission of this form does not by itself form an attorney-client relationship nor does filing out this form mean you have joined any lawsuit.