A mobile game developer is being sued for making misleading statements to the United States Securities and Exchange Commission prior to its initial public offering.
Abraham Jeremias, Roger Mariani and Michael Rubin filed the lawsuit on May 5 in U.S. District Court Southern District of New York against iDreamSky Technology claiming the company mislead investors about its business operations in China.
The company owns subsidiaries in China, which develop mobile games. The statements made prior to the initial public offering stated it had a “strong competitive position in the Chinese market." However, in March, the lawsuit claims, it was revealed that iDreamSky was facing “significant embedded operational and financial difficulties from unpredictable and delayed source code receipt for the launch of games.”
After the news came out the company's stock declined more than 33 percent to $7.22 per share, the lawsuit said.
The plaintiffs are seeking class status for those who purchased iDreamSky stock at its initial public offering on August 7, 2014. The plaintiffs are also seeking an unspecified amount of damages plus court costs.
They are represented by Joseph H. Weiss and Mark D. Smilow attorneys in New York City.
United States District Court Southern District of New York case number 1:15-cv-03484.