February 25, 2020
Bernstein Liebhard LLP announced today that the court appointed the Firm as lead counsel in a securities class action lawsuit pending in the Southern District of New York on behalf of those who purchased or acquired shares of HEXO Corp., Inc. (“HEXO” or the “Company”) (NYSE: HEXO) between January 25, 2019 and November 15, 2019, (the “Class Period”).
The initial complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges Defendants failed to disclose to investors that: (1) HEXO’s reported inventory was misstated as the Company was failing to write down or write off obsolete product that no longer had value; (2) HEXO was engaging in channel-stuffing in order to inflate its revenue figures and meet or exceed revenue guidance provided to investors; (3) HEXO was cultivating cannabis at its facility in Niagara, Ontario that was not appropriately licensed by Health Canada; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
The truth emerged through a series of disclosures occurring between Oct. 4, 2019 and Nov. 15, 2019, when the Company announced that was producing cannabis in a section of its Niagara facility that was not properly licensed with Health Canada. As a result of these disclosures, the value of HEXO stock has consistently decreased, damaging investors.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for twelve consecutive years.
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Joseph R. Seidman, Jr.
Bernstein Liebhard LLP