Securities Law Class Action Lawsuit Filed Against Alliance MMA
Alliance MMA made headlines a few months back when it became the first ever publicly traded MMA organization in the world.
However, the promotion is now being hit with a securities law class action lawsuit by Eric Schafer and other unnamed class members. Their lawsuit alleges that they have lost significant amounts of money due to Alliance MMA’s wrongful acts and omissions.
Just before the lawsuit was filed, the promotion filed an 8-K with the Securities & Exchange Commission (SEC) because certain financial claims by Alliance MMA “should no longer be relied upon because of an error in recognizing as compensation transfers of common stock by an affiliate of the Company to individuals who were at the time of transfer, or subsequently became, officers, directors or consultants of the Company.” The plaintiff, Eric Shapiro, claims he and other class members suffered significant losses due to defendants “wrongful acts and omissions.”
This isn’t the first time that Alliance MMA has made a filing with the SEC because they did once before this past March as well. They also filed Form 12b-25 because they would be unable to complete the required and annual 10-k disclosure in time. The promotions reasoning behind this was due to “efforts to resolve certain matters relating to non-cash compensation expenses.”
According to report by Bloody Elbow, the filings are a cause for concern because “the SEC Form 12b-25 is usually a red flag for investors, indicating that something is not right with a company. It either means that management is incapable of ensuring that basic tasks are performed or that the company is experiencing major financial trouble.”
The plaintiffs in the lawsuit are demanding that there should be a jury trial, Alliance MMA or its representatives have yet to respond to this legal filing. Although they have yet to actually run an MMA event, Alliance MMA has notable personalities behind it like Renzo Gracie and former UFC employee Burt Watson.
