Argo investors filed a lawsuit against the company, due to alleged false statements the firm made.
The complaint has been filed in the United States District Court for the Southern District of New York. It alleges that Argo made false and misleading statements in the offering documents for its IPO, which took place in August 2018.
According to the complaint, Argo, a blockchain company, falsely represented that it had a significant number of active users and a growing revenue stream from its mining operations.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
Crypto Fees Explained: How Not to Overpay? (Animated)
The complaint also claims that the company failed to disclose that it was heavily reliant on a single, unnamed customer for a significant portion of its revenue.
The lead complainant in the case is Aaron Murphy, who claims to have purchased Argo securities during the class period. The extent is defined as the period between the IPO and the filing of the complaint.
Murphy has filed a certification under the Securities Act. The lawsuit stated:
The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading.
Murphy also states that he is willing to serve as a representative party on behalf of a class of investors who purchased or acquired Argo securities during the class period.
The complainants are seeking to recover damages caused by the alleged violations of the federal securities laws, as well as any other relief that the court deems appropriate.
In 2019, the company was also hit with a class action lawsuit from investors. Investors claimed that the company had overstated its mining capabilities and revenue potential in the lead-up to its IPO, which was settled later on.
In other related news, Argo previously sold its mining facility in Texas.
