Cronos Group, Inc. (CRON) Accused of Misleading Shareholders
According to the complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between May 9, 2019 and March 2, 2020, Cronos Group, Inc. (CRON) announced its financial results for the first three quarters of 2019, touting net revenues of over 100%-200% from the same quarter previous year as well as quarter-over-quarter net revenue increases. Then, on February 24, 2020, Cronos stated that it would delay its fourth quarter and fiscal year 2019 earnings release. On this news, Cronos’ share price fell almost 11% to close at $6.37. The true state of Cronos’ financials was revealed on March 2, 2020, when Cronos disclosed that it had requested a 15-day extension to file its Annual Report with the SEC for its fourth quarter and fiscal year 2019. The Company attributed the delay to a “review by the Audit Committee of the Company’s Board of Directors, with the assistance of outside counsel and forensic accountants, of several bulk resin purchases and sales of products through the wholesale channel and the appropriateness of the recognition of revenue from those transactions.” On this news, Cronos’ share prices fell another 11.63%, to close at $5.32 per share. The stock continues to decline.