Due to the allegations weighing against Loop Industries and its directors concerning “false statements”, a class action request was filed in the Superior Court of Quebec by the firm LPC Avocat.
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According to a report by Hindenburg Research, Loop Industries allegedly promoted recycling technology for plastics that did not work.
Hindenburg Research, which has a short position in Loop Industries, says this company would never have generated income, although it said it had a “proven” solution.
At least one other class action request has also been filed in recent hours with our neighbors to the south by the American firm Block & Leviton LLP. Several other law firms were also looking for investors, according to various press releases.
It must be said that the stock of Loop Industries which trades on NASDAQ has plunged about $ 4 since the report was released on Tuesday.
LPC Avocat argues in its motion filed Tuesday at the end of the day that the Terrebonne company and some of its executives have “duped” investors. Which would have caused them financial losses.
It is lawyer Joey Zukran who is responsible for this file for LPC Avocat. He bases his claim in court on the findings of the Hindenburg Research report.
An investor said in the document that he notably injected US $ 3,054 (CA $ 4,016 yesterday) into Loop Industries in 2018. The value of his 300 shares at the time of writing the request was US $ 2,304 (CA $ 3,029). It fell when the report was released.
“At the time of its purchase, the applicant was unaware that Loop had made false statements, had fabricated its business model and had lied to the public and the shareholders”, one can read in the document of the Court.
The class action in securities filed by LPC Avocat seeks damages for all investors around the world for “illegal” acts allegedly committed by the company and certain members of management. The amount is not yet determined.
“The reason we have not yet quantified the total damage is that the amount will vary for each investor according to their losses. There are people who bought the stock in particular at $ 10, $ 12 and $ 13, ”lawyer Joey Zukran told the Journal.
Dozens of thousands “
Financial losses will be calculated from October 13, when the report is released. To participate in the class action, people must have purchased Loop Industries shares before this date. LPC Avocat estimates that there could be “tens of thousands” of investors.
More information is available on the LPC Avocat website. The people concerned will automatically be included in the class action if the court gives the green light to the process.