NEW YORK, Aug. 24, 2023 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Southern District of Florida on behalf of all persons or entities who (i) purchased MSP Recovery, Inc. (f/k/a Lionheart Acquisition Corp. II.) (“MSP Recovery”) (NASDAQ: LIFW) securities between April 28, 2022 and August 17, 2023, inclusive (the “Class Period”); (ii) held of Lionheart common stock eligible to vote at Lionheart’s May 18, 2022 special meeting; and (iii) purchased MSP Recovery securities pursuant and/or traceable to MSP Recovery’s registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) on July 1, 2022, as amended on July 21, 2022 and declared effective on August 5, 2022 (the “Registration Statement”).

The Complaint alleges that (i) MSP Recovery did not disclose that it was under active investigation by the SEC and federal prosecutors; (ii) certain financial information given to investors by MSP Recovery was materially false and misleading; (iii) MSP Recovery did not fully disclose the extent of its issues when it admitted that its financial results would need to be restated; (iv) MSP Recovery was unable to afford the assigned claims on which it depends, and defrauded a major healthcare provider that sold or assigned it its claims; (v) the Registration Statement contained various false or misleading statements and was negligently prepared; (vi) the Proxy contained false or misleading statements; and (vii) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times and/or were negligently prepared.

On July 31, 2023, The Miami Herald released an article entitled “‘Red flags on top of red flags’: Problems mount for UM athletics booster John Ruiz,” about defendant John H. Ruiz, MSP Recovery CEO. The Miami Herald reported, among other things, that Ruiz and MSP Recovery were “the target of federal civil and criminal investigation,” that “SEC investigators are looking at what Ruiz’s company represented to investors about its value and other possible securities violations,” and “[t]he investigation, led by FBI and IRS agents, is looking at financial representations made to investors and spending practices, according to sources.” On this news, the price of MSP Recovery shares declined nearly 6%.

Then, on August 1, 2023, MSP Recovery disclosed that it “received a subpoena dated March 1, 2023 from the SEC . . . and subsequently received a subpoena on May 10, 2023 requesting documents in connection with [MSP Recovery]’s financial statements for the periods ended June 30, 2022 and September 30, 2022 that required restatements as disclosed in [MSP Recovery]’s Form 8-K filed with the SEC on April 14, 2023.” On this news, the price of MSP Recovery shares declined more than 12%.

Thereafter, on August 10, 2023, Cano sued MSP Recovery, related entities, as well as defendant Ruiz in Florida state court, seeking nearly $67 million. In particular, the lawsuit alleged that MSP Recovery has failed to timely file documents with the SEC, including its 2022 Annual Report, to conceal that MSP Recovery is a fraud. On this news, the price of MSP Recovery shares declined more than 18%.

Finally, on August 17, 2023, MSP Recovery disclosed that it “received an additional subpoena from the SEC regarding certain funding sources of [MSP Recovery] prior to the Business Combination, as well as various statements and disclosures by [MSP Recovery] in connection with and following the Business Combination.” MSP Recovery further disclosed that day that it had received a notification letter from Nasdaq’s Listing Qualifications Department, which stated that MSP Recovery wasn’t in compliance with Nasdaq’s Rule 5250(c)(1) as a result of not having timely filed its Form 10-Q for the period ended June 30, 2023. On this news, the price of MSP Recovery declined again the next two trading days, further damaging investors.

Investors who purchased or otherwise acquired shares of MSP Recovery should contact the Firm prior to the October 23, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.

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