Future FinTech Hit With Shareholder Suit Alleging Stock Manipulation

News | June 13, 2024 By:

On Tuesday, June 4, 2024, Eric Duquette filed a shareholder derivative complaint in the United States District Court for the District of New Jersey against Future FinTech Group Inc. and several of its directors and officers.

The complaint alleges that former CEO Shanchun Huang and other individuals manipulated the price of the company’s stock and misled investors about certain matters. Future FinTech provides supply chain financial services and operates an online platform that allows users to buy and sell gift cards and pre-paid cards. It also provides cryptocurrency mining and cross-border services through blockchain technology.

The plaintiff claims that between March 2020 and January 2024, Huang engaged in unlawful stock price manipulation by purchasing thousands of shares before and after becoming CEO. The SEC also charged Huang for these actions. In the SEC complaint, it was alleged that Huang artificially inflated the stock price of Future FinTech shortly before and after taking over as CEO.

Future FinTech first received a letter from NASDAQ in February 2019 notifying them that the closing bid price for the company’s stock listed on NASDAQ fell below $1 for 30 consecutive trading days. If the stock remained below that threshold, the company risked being delisted from NASDAQ.

On January 11, 2024, the SEC issued a press release announcing fraud charges against Huang for misleading disclosures. The SEC complaint alleged unlawful market manipulation by the former executive. When this information became public, Future FinTech’s stock price dropped over 20% to close at $1.02 per share the next day.

The shareholder complaint alleges that throughout this period, known as the “Relevant Period,” Huang and other directors withheld important information about stock price manipulation and governmental legal proceedings from investors. The plaintiff seeks to hold these individuals liable for securities law violations through a class action lawsuit. It remains to be seen how Future FinTech will address the oversight issues brought to light by these legal actions.

Please contact BlockTribune for access to a copy of this filing.