Cemtrex Files $170 Million Lawsuit against Richard Pearson, Seeking Alpha author, and Others for Trade Libel
Date : 03/06/2017 @ 3:31PM
Complaint filed in the District Court for the Eastern District of New York alleging Pearson publicly disseminated through Seeking Alpha false and libelous statements about Cemtrex to drive Cemtrex stock price down while taking short position in Cemtrex stock to gain a financial windfall.
Cemtrex, Inc. (Nasdaq CM:CETX, CETXP, CETXW), a global diversified industrial and manufacturing company, today announced that it has filed a federal trade libel and tortious interference lawsuit against Ricardo Pearson (aka Richard Pearson) and those others who aided and abetted Pearson’s market manipulation by shorting the shares of Cemtrex, in the United States District Court for the Eastern District of New York, alleging that Mr. Pearson publicly disseminated through the Seeking Alpha website false and libelous statements about Cemtrex to drive the Cemtrex stock price down, while at the same time having a short position in Cemtrex stock to gain a financial windfall. The lawsuit’s Complaint, which is also being filed with the SEC today as an exhibit to Cemtrex’s current report on Form 8-K, contains a point-by-point rebuttal of each and every one of Pearson’s claims. Cemtrex is seeking total damages of $170 million, including punitive damages, money damages and interest.
Defendant Ricardo Pearson, who uses the pseudonym “Richard Pearson,” is a veteran short seller and who has been allegedly involved in writing negative articles about and shorting the shares of other companies to manipulate the shares down to profit from the share price collapse. On February 22, 2017, he published a malicious and libelous “report” on Cemtrex causing Cemtrex’s share price to quickly drop in value.
Among the false allegations in Pearson’s so-called report were the false and salacious allegations regarding accounting professionals affiliated with Cemtrex. Pearson falsely claimed that the auditor for Cemtrex’s 2014 and earlier financial statements was defunct at the time of these reports, which it was not, and made numerous false statements regarding Cemtrex’s current auditor, Bharat Parikh Associates, suggesting that the firm was run by a disbarred accountant. In fact, Cemtrex’s accounting firm is a PCAOB recognized and compliant auditing firm, in good standing in all respects.
Cemtrex CEO Saagar Govil commented, “This lawsuit is critical to defend the interests of all of the company’s shareholders, recent investors, customers and business partners.” He added, “We felt this lawsuit was the best course of action to make sure those looking to profit by trying to frighten our investors and customers, and by circumventing appropriate and established channels for raising shareholder concerns, do not use this avenue to do so again.”
Cemtrex intends to vigorously prosecute this lawsuit against the meritless claims that have been asserted against it.
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