The law firm of Wohl & Fruchter LLP announces that it is investigating possible violations of federal securities laws by officers and directors of Elephant Talk Communications Corp. (ETAK) (NYSE: ETAK).
On May 23, 2013, ETAK announced that it had received a delisting notice from the New York Stock Exchange (NYSE) indicating that ETAK does not satisfy the continued listing standards of the NYSE insofar as the Company’s sustained losses and financial condition have led the NYSE to question whether the Company can continue operations and/or meet its obligations as they mature.
In order to maintain its NYSE listing, the Company was directed to submit a specific plan of compliance (Plan) by May 31, 2013, addressing how it intends to regain compliance by June 30, 2013. As of the close of trading on June 5, 2013, the Company had not yet announced the filing of a Plan with the NYSE.
On June 3, 2013, the Company announced that it had received $10.5 million from investors pursuant to a Securities Purchase Agreement, including a $3 million investment by CEO Steven van der Velden. Under the terms of the Securities Purchase Agreements, the investors will receive 14,000,000 shares of ETAK common stock at a price of $0.75 per share, and warrants to acquire 6,300,000 shares of ETAK common stock, with a per share exercise price of $0.975. As per the prospectus for the above offering (Offering), the Company had 118,269,117 shares of common stock outstanding as of June 3, 2013. The Offering is thus highly dilutive to existing shareholders.
On the above news, ETAK shares have declined over 32% from a close of $1.08/share on May 23, 2013, to $0.73/share as of the close on June 5, 2013.
Wohl & Fruchter’s investigation concerns whether the officers and directors of ETAK violated federal securities laws by, among other things, continually reassuring investors that the business was improving even as the Company’s financial condition deteriorated.
Persons with relevant information, and ETAK shareholders with questions about this investigation, are invited to contact the attorney below, or our Firm by calling 866.582.8140.
Additional information is available on our website at: http://www.wohlfruchter.com/cases/etak.
About Wohl & Fruchter
Wohl & Fruchter LLP represents plaintiffs in litigation arising from fraud and other fiduciary breaches by corporate managers, as well as other complex litigation matters. Please visit our website,www.wohlfruchter.com, to learn more about our Firm, or contact one of our partners.
This release may be deemed to constitute attorney advertising.