Aurora Cannabis has agreed to settle a class action lawsuit regarding allegations it artificially inflated its profits in 2019.
According to Yahoo Finance Canada, the Canadian cannabis giant reached an undisclosed settlement via mediation on March 04 with the plaintiffs, understood to be a group of investors who purchased Aurora stock between January and November 2019.
The plaintiffs argue that Aurora reported a ‘sham’ transaction in its Q4 2019 figures and subsequently misled investors on numerous fronts, including the company’s ability to turn a profit.
This alleged transaction relates to a $21.7m sale of dried cannabis to Radient Technologies, a company partly owned by Aurora at the time, with an Aurora executive on its board.
According to the lawsuit, there was no legitimate reason for Radient to buy the cannabis, which they also say was later resold back to Aurora.
The transaction came at a time of increasing pressure for Aurora and many of its peers to show investors they could turn a profit after their stock prices had fallen off a cliff months earlier.
None of the plaintiffs’ claims have been proven in court, and Aurora has refused to comment on the lawsuit, citing company policy not to comment on internal legal matters.
In February, Aurora became the latest company to pursue a stock consolidation to artificially boost its share price and avoid being delisted from the NASDAQ stock exchange.
