Riot Blockchain, the biotech company that in October morphed into a cryptocurrency outfit, may soon incur some shareholder wrath following an explosive report released Friday.
A Manhattan law firm on Monday said it filed a shareholder suit against the company, claiming Riot and its executives “made materially false and misleading statements about the company’s business, operational and compliance policies.”
The suit caps off a rough four days for the company, which until Oct. 4 was a biotech penny stock known as Bioptix.
On that day, Chief Executive John O’Rourke, seeing an opportunity in the red-hot crypto space, changed the company name — and saw its shares soar 372 percent in two months, to $38.60.
While some of the initial exuberance wore off, Riot closed at $17.20 on Feb. 15.
The next day, CNBC aired a story skeptical of the reasons for Riot’s transformation.