On Tuesday, the Southern District of New York issued an order granting class certification in the case of In re Aphria, Inc. Securities Litigation.
According to the court, Aphria is a Canadian medical cannabis producer that is traded on the Toronto Stock Exchange and the New York Stock Exchange. According to the amended complaint, on July 17, 2018, Aphria announced that it would acquire a series of Latin American Assets from a closely related company, Scythian, for $193 million. However, the plaintiffs allege that the proposed transaction was a sham because the Latin American Assets were largely non-operational and not worth the $193 million value.
The complaint states that the transaction was initiated by several Aphria insiders to steal money from Aphria, and once the fraud was exposed to the market, Aphira’s stock plummeted resulting in investors losing millions. Accordingly, the plaintiffs filed the present lawsuit against Aphria, several of its directors and SOL Global Investments Corporation alleging violations of the Securities Exchange Act of 1934. The order states that on September 30, 2020, the court dismissed several defendants leaving only Aphira, its CEO and its CFO as defendants.
The complaint states that on January 28, 2022, the plaintiffs filed a motion for class certification seeking certification for all people and entities who purchased Aphira securities between July 17, 2018 and April 12, 2019. In the order, the court held that the proposed class satisfies the numerosity, commonality, typicality and adequacy requirements of Federal Rule of Civil Procedure Rule 23(A) and that the class was identifiable and ascertainable.
Therefore, the court granted the plaintiff’s motion and certified its proposed class. Additionally, the court appointed Shawn Cunix as class representative and Levi & Korsinsky as class counsel. Aphria along with its CEO and CFO are represented by Quinn Emanuel Urquhart & Sullivan and Latham & Watkins LLP.
