Investigation
BioXcel Therapeutics, Inc. (BTAI)
Confidential investigation: officers & directors’ potential breach of fiduciary duties to investors.
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Investigation
06/29/2021
Initial Lawsuit
06/29/2021
Lawsuit Progression
05/05/2022
This is a securities class action on behalf of all purchasers of Rocket Class A common stock between February 25, 2021 and May 5, 2021, both dates inclusive.
According to the complaint, 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, defendants allegedly failed to disclose to investors:
(a) that Rocket’s gain on sale margins were contracting at the highest rate in two years as a result of increased competition among mortgage lenders, an unfavorable shift toward the lower margin Partner Network operating segment and compression in the price spread between the primary and secondary mortgage markets;
(b) that Rocket was engaged in a price war and battle for market share with its primary competitors in the wholesale market, which was further compressing margins in Rocket’s Partner Network operating segment;
(c) that the adverse trends identified above were accelerating and, as a result, Rocket’s gain on sale margins were on track to plummet at least 140 basis points in the first six months of 2021;
(d) that, as a result of the above, the favorable market conditions that had preceded the Class Period and allowed Rocket to achieve historically high gain on sale margins had vanished as the Company’s gain on sale margins had returned to levels not seen since the first quarter of 2019;
(e) that, rather than remaining elevated due to surging demand, Rocket’s Company-wide gain-on-sale margins had fallen materially below recent historical averages; and
(f) 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.
Confidential investigation: officers & directors’ potential breach of fiduciary duties to investors.