May 28, 2020 - A second amended consolidated complaint was filed.

September 21, 2018 - An amended consolidated complaint was filed.

June 29, 2018 - An amended complaint was filed.

August 31, 2017 - The case was transferred to the U.S. District Court for the Eastern District of New York.

July 14, 2017 (Shareholders Foundation) - An investor in shares of DryShips Inc. (NASDAQ:DRYS) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by DryShips Inc. in connection with certain allegedly false and misleading statements made between June 8, 2016, and July 12, 2017.

According to the complaint the plaintiff alleges on behalf of purchasers of DryShips Inc. (NASDAQ:DRYS) common shares between June 8, 2016, and July 12, 2017, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between June 8, 2016, and July 12, 2017, the Defendants made false and/or misleading statements and/or failed to disclose that the Defendants engaged in a systemic stock-manipulation scheme to artificially inflate DryShips’ share price, that DryShips’ transactions with Kalani were an illegal capital-raising scheme, due in part to Kalani’s failure to register as an underwriter with the SEC, and that as a result of the foregoing, DryShips’ public statements were materially false and misleading at all relevant times.

DryShips Inc. reported that its annual Total Revenue declined from $969.83 million in 2015 to $51.93 million in 2016 and that its Net loss decreased from over $2.84 billion in 2015 to $198.69 million in 2016.

On July 13, 2017,an article was published entitled “A Shipping Company’s Bizarre Stock Maneuvers Create High Seas Intrigue”. The article described in detail the various transactions between DryShips and Kalani—namely, how DryShips’ influxes of cash stoked investor interest in DryShips, enabling the Company to issue still more shares, which it then continued to sell to Kalani. Kalani ultimately acquired securities convertible to more than $626 million in DryShips common stock, roughly 100 times DryShips’ stock market value as of early November 2016. Meanwhile, to counter share-value dilution and avoid NASDAQ delisting, DryShips executed a series of reverse stock splits.
As he article stated, however, because Kalani purchased DryShips stock with the intention of reselling, the transactions between DryShips and Kalani essentially constituted “pseudo-underwriting”, with Kalani in the position of the underwriter of a de factopublic offering. Kalani, however, never registered as an underwriter with the SEC, in violation of the federal securities laws. Moreover, the issuance of tens of millions of new DryShips shares significantly diluted shareholder value, while the frequent and sharp spikes and drops in DryShip’s common share price, caused by DryShip’s illegal capital-raising, cost the Company’s shareholders hundreds of millions of dollars.