Noah Hermann Seeks Lead Plaintiff Status in NFT Securities Case Against Midnight Hub
On Monday, January 6, 2025, Noah Hermann filed a motion in the US District Court for the Northern District of California to appoint him as Lead Plaintiff and his selected legal team as Co-Lead Counsel in a securities class action. The motion is related to allegations against defendants Brian Veluz-Nepomuceno, Percival Ong, Midnight Hub, and Rooms.tv for violations of the Securities Act of 1933.
The motion is set for a hearing on February 27, 2025, at 10:00 AM in San Francisco, before Judge James Donato. Responses to the motion are due by January 21, 2025, with any replies due by January 28, 2025. Hermann asserts that he has the largest known financial interest in the case, reporting losses of approximately $43,563 resulting from his investments in non-fungible tokens (NFTs) related to the defendants’ projects.
The class period for the alleged violations spans from January 15, 2023, to March 31, 2024. Hermann claims that he is qualified to represent the class because he timely filed the motion, has the largest financial stake in the relief sought, and meets the adequacy and typicality requirements outlined in Federal Rule of Civil Procedure 23.
The allegations stem from the promotion of Midnight Hub, a Web3 ecosystem purportedly designed to foster community-run projects, including a streaming platform called Digital Nomads TV. The defendants marketed their NFTs, including the ROOMS NFTs and Digital Nomads NFTs, as investments that would provide holders with premium access to the platform and profit-sharing opportunities. Hermann contends that these NFTs qualify as securities under the Securities Act.
According to the motion, the defendants failed to file a registration statement with the Securities and Exchange Commission (SEC) prior to the sale of the NFTs, violating Sections 5 and 12(a)(1) of the Securities Act. Hermann’s motion points out that the defendants allegedly made misleading statements regarding the viability and potential profitability of the Midnight Hub ecosystem, leading investors to believe their capital would contribute to a sustainable project.
Hermann’s legal team, comprising Wolf Popper LLP and Burwick Law PLLC, argues that they possess substantial experience in securities litigation and digital asset law. The motion includes a declaration from attorney Philip M. Black, who states that both firms have a proven track record of successfully handling securities fraud cases and related class actions.
The motion outlines the procedural steps set by the Private Securities Litigation Reform Act (PSLRA) for selecting a Lead Plaintiff. Hermann’s motion argues that he meets all the requirements, having filed the motion in response to a notice published on November 7, 2024, which informed potential class members about the ongoing litigation. This notice allowed class members to move for appointment as lead plaintiff within 60 days, a deadline Hermann adhered to.
Hermann claims his approximate losses of 197 $SOL, which translates to $43,563 USD, position him with the largest financial interest in the case. He purchased 312 NFTs during the class period and still holds 301 of them, as there is currently no functioning market for these digital assets.
The motion emphasizes that the defendants promoted the NFTs amid assertions that they would appreciate in value and provide various benefits to holders. However, Hermann alleges that after the initial NFT sales, the defendants ceased development of the Midnight Hub project, causing the value of the NFTs to plummet.
Hermann’s legal team contends that the defendants’ actions involved a common enterprise, pooling investor funds for the development of the Midnight Hub, which they argue constitutes a violation of securities law. The motion seeks to establish Hermann as the most adequate plaintiff to represent the class due to his significant financial loss and willingness to serve in a representative capacity.
Please contact BlockTribune for access to a copy of this filing.
