RM LAW, P.C. announces that a class action lawsuit has been filed on behalf of all persons or entities that purchased HF Foods Group Inc. ("HF Foods" or the "Company") (NASDAQ: HFFG) securities during the period from August 23, 2018 through March 23, 2020, 2020, inclusive (the “Class Period”).
HF Foods shareholders may, no later than May 28, 2020, move the Court for appointment as a lead plaintiff of the Class. If you purchased shares of HF Foods and would like to learn more about these claims or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free at (844) 291-9299 or to sign up online, click here.
HF Foods markets and distributes produce, frozen and dry food products, and non-food products to Asian restaurants and other foodservice customers throughout the Southeast, Pacific, and Mountain West regions of the United States. On June 25, 2019, HF Foods announced its merger with B&R Global Holdings, Inc.
The HF Foods securities class action lawsuit alleges that defendants made false and misleading statements and/or failed to disclose that: (i) HF Foods engaged in undisclosed related-party transactions; (ii) HF Foods insiders and related parties were enriching themselves by misusing shareholder funds; (iii) HF Foods was "gaming" the FTSE/Russell Index by masking the true number of shares free floating; and (iv) as a result, defendants’ public statements were materially false and/or misleading at all relevant times.
On March 23, 2020, Hindenburg Research published a report revealing that HF Foods had, among other issues, failed to disclose: (i) transactions with related parties; (ii) its flagrant misuse of shareholder funds; and (iii) its gaming of the FTSE/Russell Index criteria. Specifically, regarding HF Foods’ undisclosed related-party transactions, the report noted that HF Food’s "massive $509 million merger with food distributor B&R appears to be a blatant undisclosed related-party transaction" and that the report’s authors believed HF Food insiders were using "related-party transactions to suck cash out of the business, eventually leaving shareholders with a hollow, debt-laden company."
As for HF Foods’ misuse of shareholder funds, the report revealed that HF Foods "appears to have also used shareholder cash to purchase an undisclosed fleet of exotic supercars including Ferraris, Porsches, and a Bentley." And with regard to HF Foods’ "gaming" of the FTSE/Russell Index criteria, the report explained that the "B&R merger more than doubled [HF Foods’] share count. However, FTSE/Russell mistakenly included almost all of these shares as part of [HF Foods’] free float, which sent [HF Foods’ stock] price and volume soaring on Friday’s index rebalancing . . . . We believe [HF Foods] and its insiders are masking the true number of shares held by its affiliates. Once made clear to FTSE/Russell, we expect the recent forced index buying in [HF Foods] will reverse and become forced selling." On this news, the price of HF Foods’ stock fell by more than 20%.
If you are a member of the class, you may, no later than May 28, 2020, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain RM LAW, P.C. or other counsel of your choice, to serve as your counsel in this action.