NEW YORK, June 26, 2020 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against SCWorx Corporation (“SCWorx” or the “Company”) (WORX) and certain of its officers. The class action, filed in United States District Court for the Southern District of New York, and indexed under 20-cv-04072, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired SCWorx securities between April 13, 2020, and April 17, 2020, inclusive (the “Class Period”). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased SCWorx securities during the class period, you have until June 29, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
SCWorx provides data content and services related to the repair, normalization, and interoperability of information for healthcare providers.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about SCWorx’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (i) SCWorx’s supplier for COVID-19 tests had previously misrepresented its operations; (ii) SCWorx’s buyer was a small company that was unlikely to adequately support the purported volume of orders for COVID-19 tests; (iii) as a result, the Company’s purchase order for COVID-19 tests had been overstated or entirely fabricated; and (iv) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
On April 13, 2020, before the market opened, SCWorx announced that it had received a committed purchase order of two million COVID-19 rapid testing kits, “with provision for additional weekly orders of 2 million units for 23 weeks, valued at $35M per week.”
On this news, the Company’s share price increased by $9.77, to close at $12.02 per share on April 13, 2020.
On April 17, 2020, Hindenburg Research issued a report doubting the validity of the deal, calling it “completely bogus.” According to Hindenburg Research, the COVID-19 test supplier that SCWorx is buying from, Promedical, has a Chief Executive Officer “who formerly ran another business accused of defrauding its investors and customers” and “was also alleged to have falsified his medical credentials,” Promedical claimed to the Food and Drug Administration and regulators in Australia to be offering COVID-19 test kits manufactured by Wondfo, but “Wondfo put out a press release days ago stating that Promedical ‘fraudulently mispresented themselves’ as sellers of its Covid-19 tests and disavowed any relationship,” and the buyer that SCWorx claimed to have lined up does not appear to be “capable of handling hundreds of millions of dollars in orders.”
On this news, the Company’s share price fell $1.19, or more than 17%, over three consecutive trading sessions to close at $5.76 per share on April 21, 2020, on unusually heavy trading volume.
On April 22, 2020, the Securities and Exchange Commission halted trading of the Company’s stock. As of the filing of this complaint, trading remains halted.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby