Pomerantz LLP announces that a class action lawsuit has been filed against Paysign, Inc. (“Paysign” or the “Company”) (NASDAQ: PAYS) and certain of its officers. The class action, filed in United States District Court for the District of Nevada, and indexed under 20-cv-00585, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Paysign securities between March 12, 2019, and March 15, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
Paysign provides prepaid card programs and processing services under the PaySign brand to corporations, government agencies, universities, and other organizations. The Company changed its name from 3PEA International Inc. to Paysign, Inc. on April 23, 2019.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about Paysign’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (i) Paysign’s internal control over financial reporting was not effective; (ii) Paysign’s information technology (“IT”) general controls were not effective; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On March 16, 2020, during pre-market hours, Paysign announced that it would be unable to file its annual financial report with the SEC in a timely fashion because of an ongoing audit, advising investors that “management identified material weaknesses related to (i) assessment of internal controls over financial reporting and (ii) [IT] general controls.”
On this news, Paysign’s stock price fell $0.93 per share, or 16.85%, to close at $4.59 per share on March 16, 2020.