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Cronos Group Inc. (NASDAQ: CRON) Investor Securities Class Action Lawsuit 03/11/2020

  • If you purchased shares of Cronos Group Inc. (NASDAQ: CRON), you may have certain options. Please contact the Shareholders Foundation, Inc.

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Lawsuit Overview

Company
Cronos Group Inc.
Security
NASDAQ: CRON

Case Name
Cronos Group Shareholder Class Action Lawsuit 03/11/2020
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the Eastern District of New York

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Summary

March 11, 2020 - An investor in shares of Cronos Group Inc. (NASDAQ: CRON) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Cronos Group Inc., formerly known as PharmaCan Capital Corp, in connection with certain allegedly false and misleading statements made between May 9, 2019, and March 2, 2020.

Canada based Cronos Group Inc., formerly known as PharmaCan Capital Corp., is a principal investment firm.

On Feb. 24, 2020, Cronos Group Inc announced, without explanation, it would not be (i) timely filing its Q4 and FY 2019 earnings release and (ii) hosting a conference call with investors previously scheduled for Feb. 27, 2020. In response, the price of Cronos shares sharply fell.

On Mar. 2, 2020, Cronos Group Inc revealed the existence of a continuing review by the Audit Committee of the Company's Board of Directors, with the assistance of outside counsel and forensic accountants, of several bulk resin purchases and sales of products through the wholesale channel and the appropriateness of the recognition of revenue from those transactions. The Company further stated it expects to report for FY 2019: (1) a material inventory write-down; (2) a material decrease in gross profit; and, (3) a material increase in operating loss. This news caused the price of Cronos shares sharply decline during after-hours trading. Shares of Cronos Group Inc. (NASDAQ: CRON) declined from $9.00 per share on January 21, 2020 to as low as $5.14 per share on March 3, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of Cronos Group Inc. (NASDAQ: CRON) common shares between May 9, 2019, and March 2, 2020, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between May 9, 2019, and March 2, 2020, the Defendants made false and/or misleading statements and/or failed to disclose that Cronos had engaged in significant transactions for which its revenue recognition was inappropriate, that the foregoing would foreseeably necessitate reviews that would delay the Company’s ability to timely file its periodic reports, and that as a result, the Company’s public statements were materially false and misleading at all relevant times.