In re Hexo Corp. Securities Litigation
Bernstein Liebhard is sole lead counsel representing the lead plaintiffs in a securities fraud class action entitled In re Hexo Corp. Securities Litigation, No. 1:19-cv-10965-NRB. This action is brought on behalf of investors that purchased or otherwise acquired HEXO securities between January 23, 2019 and March 30, 2020, inclusive (the “Class Period”) on the New York Stock Exchange (“NYSE”) or NYSE American exchange, including pursuant or traceable to HEXO’s January 25, 2019 Initial Public Offering of 8.8 million shares (the “Offering”). Lead plaintiffs seek to pursue remedies under the Securities Act of 1933 and under the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, lead plaintiffs allege that certain defendants made material misstatements and omissions of material fact in HEXO’s Offering documents about the Company’s purportedly transformative five-year supply contract (the “SQDC Agreement”) with the Canadian Government’s Societe Quebecoise du Canabis (“SQDC”). In particular, these defendants made misrepresentations about the SQDC Agreement’s key “take or pay” feature that required the SQDC to buy 20,000 kg of cannabis in the first year of the contract – purportedly guaranteeing a substantial first-year revenue floor to HEXO even if demand for cannabis did not support the SQDC’s purchase commitment. Lead plaintiffs also allege that Defendants made misstatements and omissions throughout the Class Period about the SQDC Agreement, misrepresented that HEXO could “confidently” achieve FY2020 net revenue of C$400 million (or more) due largely to the guaranteed nature of the SQDC Agreement, made misstatements and omissions about the licensing of an important Company facility, and reported inflated inventory figures. As the truth about HEXO slowly unraveled through a series of Class Period disclosures, HEXO investors suffered hundreds of millions of dollars in losses. The action is pending.
