SAN DIEGO and LAS VEGAS, May 2, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of CannaVEST Corp. (OTC: CANV) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between May 20, 2013 and April 3, 2014 (the "Class Period"). CannaVEST develops, produces, markets, and distributes hemp-based consumer products to the nutriceutical industry.
CannaVEST Is Accused of Misrepresenting Its Sales and Goodwill
According to the complaint, shares of CannaVest fell $7.30 per share, or more than 20%, to close at $25.30 on April 3, 2014, following the company's announcement that its financials reported on the Form 10-Qs for the quarters ended March 31, 2013, June 30, 2013, and September 30, 2013 were misreported and could no longer be relied upon. Specifically, the company revealed that the allocation methodology used by management were not in accordance with GAAP. Shares of CannaVest declined an additional 19.5%, or $4.49 per share, to close at $18.51 on April 14, 2014, following the company's release of an Amended Form 8-K which disclosed that it was restating its goodwill for the periods ending March 31, 2013 and June 30, 2013, and restating its sales figures for the quarter ended March 31, 2013.
The complaint further alleges that, during the class period, CannaVest failed to disclose to these facts to investors causing the company's stock to trade at artificially inflated prices during the class period.
CannaVEST Investors Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo LLP
If you invested in CannaVEST and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: www.robbinsarroyo.com/shareholders-rights-blog/cannavest-corp
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP