On April 30, 2018, Pomerantz LLP was appointed Co-Lead Counsel in a class action lawsuit against Diana Containerships Inc. (“Diana” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Eastern District of New York, and docketed under 17-cv-06236, is on behalf of a class consisting of investors who purchased or otherwise acquired Diana securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
Diana Containerships Inc., through its subsidiaries, operates in the seaborne transportation industry in Greece. It owns and operates containerships, as well as focuses on containership acquisition opportunities. The Company also engages in chartering of its 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) through his control of Diana, Symeon Palios (“Palios”) caused Diana to sell its common shares and securities convertible into common shares to an entity named Kalani Investments Limited (“Kalani”) at a significant discount to market price and to file registration statements so that Kalani could resell these shares into the market; (ii) when Kalani's sales of Diana stock caused the price of Diana stock to decline, the Company would reverse split the stock, causing a certain number of outstanding shares to be merged into a single share, and thereby raise the price of Diana stock; (iii) then Diana would again sell securities to Kalani and the same pattern of transactions would ensue; (iv) Defendants failed to disclose the true purpose of the transactions and related stock issuances and reverses, to provide Diana with financing that benefited Palios and his related companies and family members and otherwise funnel money to Company insiders; and (v) as a result of the foregoing, Diana’s public statements were materially false and misleading at all relevant times.
By October 3, 2017, as a result of defendants' ongoing dilutive and manipulative conduct, the price of Diana common stock had declined to close at $0.47 per share on an unadjusted basis. At this share price, Diana had a market capitalization of less than one million dollars, despite having raised millions of dollars from investors since January 2017.