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Genius Group Ltd., a Singapore-based education company, said Wednesday it is launching legal action against various parties over illegal trading in its shares.
The news comes after the company in January appointed a former FBI director to lead a task force investigating the alleged illegal trading in its stock that it first disclosed in early January.
The company is concerned that it has been the target of naked short selling, which is illegal under Securities and Exchange Commission rules.
In regular short trading, an investor borrows shares from someone else, then sells them and waits for the stock price to fall. When that happens, the shares are bought cheaper and returned to the previous owner, with the short seller pocketing the difference as profit.
In naked short selling, investors don’t bother borrowing the stock first and simply sell shares with a promise to deliver them at a later date. When that promise is not fulfilled, it’s known as failure to deliver.
Genius
GNS,
CEO Roger Hamilton told MarketWatch in January that the company wanted the activity, which had pressured its stock price for months, to stop.
“They’re taking value away from our shareholders. They’re predators. They’re doing something illegal, and we want it to stop, whether that means getting regulators to enforce existing regulations or put new ones in place,” Hamilton said.
For more, see: Genius Group CEO on why his company is fighting back against naked short sellers — and it’s not alone
The company hired the legal teams of Christian Levine Law Group LLC and Warshaw Burstein LLP and share-tracking company ShareIntel and has now instructed them to commence legal actions.
“The company is currently pursuing a combination of negotiations, legal action and shareholder actions with an aim to minimize and recover the costs that illegal market manipulation has had on our share price,” Hamilton said in a Wednesday release.
Genius Group is not alone in fighting against such activity. Since its January announcement, a flurry of other, mostly penny-stock companies, have also hired ShareIntel to go after naked short sellers.
The list includes Verb Technology Co.
VERB,
a provider of interactive video-based sales apps with operations in Newport, Calif., and Lehi, Utah; e-scooter and e-bike maker Helbiz Inc.
HLBZ,
; Creatd Inc.
CRTD,
which aims to unlock creativity for creators, brands and consumers; San Diego-based Ryvyl Inc.
RVYL,
a blockchain and stablecoin tech company; and Blink Charging Co.
BLNK,
a maker of charging equipment for electric vehicles.
Alarum Technologies Ltd.
ALAR,
an Israeli provider of cybersecurity for consumers and companies, joined the group on Tuesday, saying it believes its American Depositary Shares have also been artificially depressed by naked short sellers. The company said it’s reviewing its options and may retain specialists to investigate trading patterns.
Genius’ stock was down 2. It has rocketed 980% over the past three months through Tuesday, while the S&P 500
SPX,
has slipped 0.2%.
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