NEW YORK, Jan. 11, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Aphria Inc. (“Aphria” or the “Company”) (NYSE: APHA) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and indexed under 18-cv-11427, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise acquired Aphria securities between October 18, 2018, and December 3, 2018, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Aphria securities between October 18, 2018, and December 3, 2018, both dates inclusive, you have until February 4, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com . To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Aphria is headquartered in Leamington, Canada. The Company produces and sells medical cannabis in Canada and internationally. The Company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. It serves patients and health professionals. The Company also sells its products online.
On January 29, 2018, the Company announced its acquisition of Nuuvera Inc. (“Nuuvera”) for approximately C$826 million, which was completed on March 23, 2018 (at a reduced price valued at approximately C$425 million). Announcing the acquisition, the Company touted Nuuvera as “a leading, global cannabis company with a strong presence in Europe, Africa and the Middle East[.]”
Then, on July 17, 2018, the Company issued a press release announcing its planned expansion into Latin America and the Caribbean, through a massive transaction whereby Aphria acquired Scythian Biosciences Inc. (“Scythian”) for approximately C$280 million, in cash and Company stock.
According to various public statements by the Company and media reports, Andy DeFrancesco (“DeFrancesco”), controller of the Delavaco Group (“Delavaco”), a purported private equity fund, participated in the founding investment of Aphria. DeFrancesco and the Delavaco Group have purportedly invested or advised on every Aphria equity financing.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Aphria engaged in numerous fraudulent acquisitions and transactions in order to provide undisclosed benefits to its insiders; (ii) Aphria substantially overpaid for the assets it acquired in 2018, which in reality had questionable value or were worthless; (iii) Aphria acquired these assets from undisclosed related parties, including Andy DeFrancesco; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On December 3, 2018, Hindenburg Research (“Hindenburg”) published an article entitled “Aphria: A Shell Game with a Cannabis Business on the Side,” alleging that “Aphria is part of a scheme orchestrated by a network of insiders to divert funds away from shareholders into their own pockets.” The article cited a thorough, on-the-ground investigation into Aphria’s latest investments and described in detail the poor quality and questionable value of those investments.
Following publication of the Hindenburg article, Aphria’s stock price fell $1.85 per share, or roughly 23.4%, to close at $6.05 per share on December 3, 2018.
Then, on December 4, 2018, the Financial Post published an interview with DeFrancesco to address the allegations described above. DeFrancesco seemingly confirmed his participation in the transactions, stating that the use of shell companies was not unusual in private equity transactions and defending the quality of the assets.
On this news, Aphria’s stock price fell an additional $1.54 per share, or 25.45%, to close at $4.51 per share on December 4, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT: Robert S. Willoughby Pomerantz LLP rswilloughby@pomlaw.com 888-476-6529 ext. 9980
