Lead Plaintiff Deadline: 01/27/2020
SUMMARY OF CASE:
A securities class action has been filed against HEXO Corp. (HEXO ) on behalf of all persons and entities who purchased or otherwise acquired HEXO common stock between January 25, 2019 through November 15, 2019. This case has been filed in the USDC – S.D.N.Y.
The Complaint alleges that the defendants misled investors throughout the Class Period by making materially false and/or misleading statements, as well as failing to disclose material adverse facts about the Company’s business, operations, and prospects.
Specifically, the Complaint alleges Defendants failed to disclose to investors that: (1) HEXO’s reported inventory was misstated as the Company was failing to write down or write off obsolete product that no longer had value; (2) HEXO was engaging in channel-stuffing in order to inflate its revenue figures and meet or exceed revenue guidance provided to investors; (3) HEXO was cultivating cannabis at its facility in Niagara, Ontario that was not appropriately licensed by Health Canada; and (4) that, 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.
The truth emerged through a series of disclosures occurring between Oct. 4, 2019 and Nov. 15, 2019, when the Company announced that was producing cannabis in a section of its Niagara facility that was not properly licensed with Health Canada.