Dryships, Others Sued Over ‘Manipulative Financing Scheme’
by Erin Shaak
Last Updated on May 8, 2018
Silverberg v. Dryships Inc. et al.
Filed: August 2, 2017 ◆§ 2:17-cv-04547
A stockholder has filed a proposed securities lawsuit against Dryships Inc., two of its chief officers, Kalani Investments Limited, and Murchinson Ltd. and an individual with control of the business.
New York
A stockholder has filed a proposed securities lawsuit against Dryships Inc., two of its chief officers, Kalani Investments Limited, and Murchinson Ltd. and an individual with control of the business. The suit takes issue with the defendants’ alleged engagement in what the plaintiff calls “a manipulative financing scheme” that ultimately resulted in stockholders losing more than 99.99 percent of the value of their shares, according to the complaint. The plaintiff describes the scheme as follows:
“Through his control of DryShips, [the company’s CEO] caused DryShips to sell shares to Kalani at a discount and to file a registration statement so that Kalani could resell the shares into the market. When Kalani’s sales of DryShips stock caused the price of DryShips stock to decline, DryShips would reverse split the stock, thereby raising the price of DryShips stock. Then, DryShips would again sell stock to Kalani and the same pattern of transactions would ensue.”
The complaint argues the defendants hid their motives from stockholders and cheated them out of the value of their shares through the series of stock transactions described above.
The suit seeks to cover a proposed class of people who purchased Dryships common stock between June 8, 2016 and July 14, 2017.
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