Gerova Financial Group Ltd

Gerova Financial Group Ltd

Gerova Financial Group Ltd Securities Settlement

The lawsuit was settled for $1.372 million in cash. The following is a summary of the proceedings in this lawsuit: ‘This Action alleges violations of the Federal Securities Laws (specifically Sections 10(b) and 20(a) of the Exchange Act (15 U.S.C. §78j(b) and 78(t)(a)) and Rule 10b-5 promulgated thereunder (17 C.F.R. §240.10b-5) against the Settling Defendants. Gerova was incorporated in Bermuda as of August 30, 2010. Prior to that date, the Company was incorporated in the Cayman Islands. During the Settlement Class Period, Gerova principal executive offices were located in Grand Cayman, Cayman Islands until May 2010, and were subsequently located in Hamilton, Bermuda. Gerova was formed in March 2007 as a blank check company, that is, a company organized for the purpose of acquiring one or more operating businesses to be identified after formation. During the Settlement Class Period, Gerova securities traded on the NYSE Alternext US Exchange (later the NYSE Amex Exchange) and on the NYSE under the ticker symbols GFC, GFC.WS, and GFC.U. Lead Plaintiffs allege that, during the Settlement Class Period, Gerova stock price was artificially inflated as a result of a series of untrue or materially misleading statements the Settling Defendants made concerning several substantial transactions in January 2010. Specifically, Lead Plaintiffs allege that Gerova failed to inform investors that, among other things, (i) the Company was unprofitable and in poor financial condition during the Settlement Class Period; (ii) the Stillwater Funds were in poor financial condition at the time they were acquired; (iii) the Company engaged in several transactions with related parties and entities controlled by Gerova insiders; and (iv) insiders were permitted to sell the Company securities at artificially inflated prices. Lead Plaintiffs further contend that the Settling Defendants made these statements knowing them to be false or misleading, or recklessly disregarding their false or misleading natures, and that investors suffered injury as a result of the alleged inflation.’

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