Live Ventures Inc.sued broker/dealers TD AmeritradeClearing Inc., E*TRADESecurities LLC and CharlesSchwab & Co. Inc. over allegations of improper trading of its stock.
In a lawsuit filed in New York State Court, the company saidit became aware of a significant share imbalance between the shares reported tobe held in the Depository Trust and Clearing Corp., which is the location broker/dealersreport their holdings, and the shares reported to Broadridge Financial Solutionsto be held by the broker/dealer's customers.
Additionally, the company said April 14 that the share imbalanceis substantial and is indicative of improper and illegal trading activity in thecompany's stock.
The suit comes after Shareholder Intelligence Services LLP, d/b/aShareIntel, which was retained by Live Ventures to investigate trading in its commonstock, identified a pattern of imbalances as of various dates in October 2015 andNovember 2015, according to a Form 8-K filed April 14.
The petition alleges that by engaging in trading or clearanceof securities, on its own behalf or on behalf of other firms or individuals, eachof the broker/dealers are processing trades, which reflect an overstatement of theamount of shares in the marketplace in comparison to the amount of legitimate sharesthat have been authorized and issued by the company that are on deposit at the DTC.As a result of the imbalance, the company is unable to comply with the state statutes,which require it to maintain an accurate list of the stockholders and are also unableto accurately determine our aggregate market capitalization.
Further, Live Ventures has petitioned for the broker/dealersto supply various documents and materials relating to the period of Aug. 1, 2015,to Nov. 30, 2015, in an effort to determine the reasons for, and cause of, the imbalance.