This is Due to Shareholder Demand for Corporate Transparency Regarding Collusion, Acting in Concert, Multiple Violations of the 4.99% rule, Using Foreign Silent Partners as Nominees and Transfer Agent Discrepancies
DBGI Corp. (NASDAQ: DBGI) announced it has cancelled 7.1 million pre-funded warrants to safeguard shareholder interests pending the outcome of a legal investigation.
The Company has been notified by concerned shareholders regarding a series of troubling allegations involving potential collusion, coordinated actions among related parties, multiple violations of the 4.99% beneficial ownership limitation, the alleged use of foreign silent partners as nominees, and discrepancies in transfer agent records.
Shareholders and stakeholders are seeking immediate clarification and corrective action from the Board of Directors regarding these matters. The Company remains committed to complying with all applicable SEC regulations and maintaining a fair and transparent market for all investors. Additional updates will be provided as the situation develops.
Concerns Regarding Collusion and Beneficial Ownership Limits
Pre-funded warrants are generally structured with a 4.99% or 9.99% beneficial ownership blocker to prevent individual holders from triggering change-of-control provisions or exceeding SEC reporting thresholds. Shareholders have raised serious concerns that certain entities may have coordinated their activities in an effort to circumvent these ownership limitations.
The Company has been urged to investigate whether related parties and attribution affiliates acted in concert to gain disproportionate influence over the Company’s share ownership, trading activity, and share price, including allegations of coordinated market manipulation.
Alleged Use of Foreign Silent Partners as Nominees
Shareholders have also requested a formal investigation into alleged misconduct, market manipulation, and the undisclosed use of foreign silent partners as nominee holders.
According to the allegations, certain entities transferred allocations of pre-funded warrants to foreign silent partners in an effort to coordinate ownership, control share allocations, and artificially influence the market price of the Company’s shares. It is further alleged that Share Purchase Agreements (SPAs) and related transfer documentation were submitted to the transfer agent in connection with these transactions.
Transfer Agent Records and Share Count Discrepancies
In addition to concerns regarding coordinated ownership, potential violations of the 4.99% beneficial ownership limitation, and the alleged use of foreign silent partners as nominees, shareholders have identified what they describe as significant discrepancies in the transfer agent’s records.
These concerns include inaccuracies in the reported number of outstanding pre-funded warrants and inconsistencies in the warrant holdings attributed to individual entities, despite the Share Purchase Agreements (SPAs) and transfer agreements that were reportedly provided to the transfer agent by what shareholders allege is a single controlling party within the group.
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