Global Digital Solutions, Inc. (Nasdaq: GDSI)
A class action has been commenced in the United States District Court for the District of New Jersey on behalf of purchasers of Global Digital Solutions, Inc. (Nasdaq: GDSI) common stock during the period between October 8, 2013 and August 12, 2016 (the “Class Period”).
The complaint charges Global Digital and certain of its officers with violations of the Securities Exchange Act of 1934. Global Digital builds mobile command/communications and specialty vehicles for emergency management, first responders, national security and law enforcement operations.
On October 22, 2012, Global Digital entered into a merger agreement to acquire 70% of Airtronic USA, Inc. once Airtronic successfully reorganized and emerged from bankruptcy. A year later, the bankruptcy court confirmed Airtronic’s reorganization plan, which included closing the merger with Global Digital in the next 60 days. Airtronics, however, refused to close the merger and the reorganization plan terminated and the reorganized Airtronic re-vested in the bankruptcy estate of Airtronic as debtor in possession.
The complaint alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) the original equipment manufacturer (“OEM”) supplier agreement with Airtronic that Global Digital disclosed in its press releases in October 2013 did not exist; (ii) Global Digital failed to remove these misleading statements from its website despite repeated requests to do so from the CEO of Airtronic; (iii) despite Global Digital’s representations during the Class Period that it expected to “be able to announce several agreements regarding potential acquisitions” that fit into its growth strategy, it had no credible financing in place to acquire any company; and (iv) Global Digital had received various communications indicating that one of the companies it had targeted for acquisition, Remington Outdoor Company, had no interest in its unsolicited offer and, in fact, had already rejected Global Digital's offer on several occasions. As a result of these false statements and/or omissions, Global Digital securities traded at artificially inflated prices during the Class Period, with its stock trading as high as $0.87 per share.
The truth regarding Global Digital’s business and prospects began to emerge in December 2013, when the merger with Airtronic did not close due in part to the Company’s failure to remove the misleading statements regarding Airtronic from its website despite Airtronic’s repeated requests. As a result, the price of the Company’s shares fell 10%. In March 2014, Bloomberg released an internal memo that Remington had sent to its employees regarding the Company’s attempt to acquire Remington, characterizing it as “‘a publicity stunt from an agenda-driven group with no credible financing options.’” This news caused the price of Global Digital stock to fall 15% over the next two days. Then on August 12, 2016, the SEC announced that it had charged Global Digital and its former CEO and CFO with defrauding investors by issuing false and misleading press releases stating that the Company was a leader in cyber arms manufacturing and security technology solutions and touting the Company’s OEM contract with Airtronic. The SEC also stated in its complaint that Global Digital “had no credible financing in place to conduct any of [the] expected acquisitions referenced” in the Company’s press releases. On this news, the Company’s shares fell 52% to close at $0.001 per share on August 12, 2016.
If you are a current shareholder and/or purchased stock between October 8, 2013 and August 12, 2016, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.
Please Note: Neither the submission to nor the receipt of information by The Law Offices of Marc S. Henzel or one of its attorneys through this website constitutes an agreement by the firm to represent the individual and does not create an attorney-client relationship.