Law firm Robbins Geller Rudman & Dowd LLP announced on April 7 that the lead plaintiff motion deadline in the Canaan securities IPO class action lawsuit was set for May 4, 2020.

The Canaan’s litigating stakeholders in the “Lemieux v. Canaan Inc.” case are expected to decide who will represent their interests, as they were accused that the initial public offering (IPO) carried out last November violated the Securities Act of 1933.

Misleading and false information provided

The lawsuit alleges that the Registration Statement for the IPO was false and provided investors with misleading information.

They are also accused of failing to disclose that their relationship with Chinese company Hangzhou Grandshores Weicheng Technology Co., Ltd. (named as “Grandshores” in the class action) was just a “related-party transaction.”

The class-action details that Grandshores’ market cap was a mere $50 million, but they only reported $16 million in cash in hand, citing a report published February 20 by Marcus Aurelious Value.

Canaan’s worst-than-reported financial health

The lawsuit claims that the financial health of Canaan was worse than what had been reported. Moreover, it did not reveal the several distributors with whom it had previously worked, where many of them were classified as “small or suspicious business.”

Furthermore, the class-action says that Canaan’s largest Chinese clients in prior years were customers who were not in the Bitcoin mining industry.

Robbins Geller Rudman & Dowd LLP said that according to the Private Securities Litigation Reform Act of 1995, any Canaan investor who purchased their securities before IPO can seek an appointment as lead plaintiff in the lawsuit, while they added the following: