Pomerantz Appointed Lead Counsel in Hebron Technology Securities Litigation
On September 16, 2020, U.S. District Judge Paul A. Engelmayer of the Southern District of New York appointed Pomerantz LLP as Lead Counsel on behalf of our client, Lead Plaintiff Edward Dahlke, in In re Hebron Technology Co. Ltd. Securities Litigation, a class action concerning allegations of Hebron’s failure to disclose related parties in several of its recent acquisitions.
Hebron develops, manufactures and provides customized installation of valves and pipe fittings for use in the pharmaceutical, biological, food and beverage, and other industries. Since July 2019, the company has also provided financial advisory services.
The complaint alleges that, between April 24, 2020 and June 3, 2020, defendants falsely touted the robust state of its business operations and prospects, while failing to disclose that many of Hebron’s acquisitions, including Beijing Hengpu and Nami Holding (Cayman) Co., Ltd., involved undisclosed related parties.
On June 3, 2020, Grizzly Research presented a report alleging that Hebron is an “insider enrichment scheme without economic basis,” citing questionable deals that included an undisclosed related party transaction for nearly $26 million.
On this news, the company’ s share price fell $8.26, or nearly 37%, to close at $14.29 per share on June 3, 2020, and continued to decline the next trading session by $2.51, or nearly 18%, to close at $11.78 per share on June 4, 2020, on unusually heavy trading volume.
This was a closely contested race between our client, Edward Dahlke, and a competing movant who alleged a considerably larger loss. However, the timing of the competing movant’s’ purchases of Hebron stock raised significant questions as to whether he would be subject to unique defenses. Judge Engelmayer ultimately sided with Pomerantz, “find[ing] that the cottage industry of issues surrounding [the competing movant’s] purchase of Hebron shares would saddle, or at least potentially saddle, his claims with unique defenses,“ which “could well divert attention from the substance of the basic claim and needlessly imperil the claims of the class.”
Pomerantz’s Hebron litigation is led by Brenda Szydlo.