According to the law firm press release, DryShips Inc. owns and operates ocean going cargo vessels worldwide. It operates through two segments, Drybulk and Offshore Support. The Drybulk segment offers drybulk commodities transportation services for the steel, electric utility, construction, and agri-food industries. The Offshore Support segment provides its services to the global offshore energy industry.
In a series of transactions beginning on or around June 8, 2016, DryShips raised hundreds of millions of dollars in capital by selling newly-issued shares directly to Kalani Investments Ltd. (“Kalani”), a British Virgin Islands firm, at a discount to the stock-market price. This influx of capital enabled DryShips to roughly double the size of its fleet to 36 vessels.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Defendants engaged in a systemic stock-manipulation scheme to artificially inflate DryShips’ share price; (ii) DryShips’ transactions with Kalani were an illegal capital-raising scheme, due in part to Kalani’s failure to register as an underwriter with the SEC; and (iii) as a result of the foregoing, DryShips’ public statements were materially false and misleading at all relevant times.
The first identified case was voluntarily dismissed on August 31, 2017. A related action continues in the Eastern District of New York docketed under 17-CV-04547.
On April 30, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on June 29. On August 21, the Court issued an Order vacating the Order of April 30, 2018 and appointed Lead Plaintiffs and Counsel. On September 21, Lead Plaintiffs filed a consolidated amended Complaint. Lead Plaintiffs filed a consolidated second amended Complaint on May 28, 2020.