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Published November 11, 2024
Investors in artificial intelligence company iLearning Engines were shocked to discover that the company’s financial statements were artificial too. A recent Hindenburg report revealed that most of company’s revenue was largely fake, making the company’s financial statements unreliable. Following this news, investors pulled the plug on the stock, causing stock price to plummet 35% in one day. Angry shareholders recently filed a class-action lawsuit hoping to recover some of their losses.
According to that lawsuit, iLearning Engines frequently published overwhelmingly positive statements about the company’s revenue and expenses, attributing much of this success to their “Technology Partner.” These reports failed to disclose this technology partner was a related party that iLearning Engines used to fake its revenue and expenses. In reality, iLearning’s revenue was 99% less than what was reported on its financial statements, with the vast majority of its revenue being fraudulently claimed through this related entity. Investors allege that executives failed to exercise proper control over iLearning’s financials, which allowed for this fraud to occur.
Investors learned the truth in August 2024, when Hindenburg Research published “iLearning Engines: An Artificial Intelligence SPAC with Artificial Partners and Artificial Revenue” and quickly sold off iLearning stock. Affected investors are now signing up for the class action lawsuit.