Insiders at blockchain-based financial services company Future FinTech Group Inc. were hit with a shareholder derivative suit on Tuesday alleging they concealed that the company’s CEO had inflated stock prices, which was revealed to the public when the U.S. Securities and Exchange Commission filed a lawsuit against him.
According to shareholder Eric Duquette’s suit filed in New Jersey federal court, Future FinTech CEO Shanchun Huang intentionally purchased company stock prior to becoming CEO in March 2020 in order to artificially propel the stock price. Huang was attempting to keep the company’s shares higher than $1 per share as the company faced delisting for failing to meet the Nasdaq stock exchange’s minimum price requirements, the SEC had alleged, Duquette noted in his suit.
In addition to Huang, Future FinTech’s Chief Financial Officer Ming Yi, former CFO Jing Chen and four directors are named as defendants in the derivative suit for their alleged participation in the scheme to prop up the company’s stock price.
