Arqit Quantum Inc. (ARQQ) Made Misleading Statements in its Offering Documents in Support of its Merger with Centricus Acquisition Corp. (CENH)
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Arqit Quantum Inc. (NASDAQ: ARQQ) securities (i) between September 7, 2021 and April 18, 2022 and/or (ii) all holders of Centricus securities as of the record date for the special meeting of shareholders held on August 31, 2021, to consider approval of the merger between Arqit and Centricus. The complaint alleges violations of the Securities Exchange Act of 1934. Arqit claims to be a cybersecurity company that has pioneered a unique quantum encryption technology.
According to the complaint, in connection with the merger with Centricus, Arqit alleged its quantum encryption technology would be secure against current and future forms of cyberattacks, including from a quantum computer. Arqit also represented that it had “already signed major, long-term contracts for its services with large companies and government institutions.”
However, defendants failed to disclose that Arqit’s proposed encryption technology would require widespread adoption of new protocols and standards for telecommunications, with British cybersecurity officials having questioned the viability of Arqit’s proposed encryption technology in a meeting in 2020. Further, the British government was not an Arqit customer but, rather, providing grants to Arqit, and Arqit had little more than an early-stage prototype of its encryption system at the time of the merger.
These facts became known on April 18, 2022, when The Wall Street Journal published an article titled, “British Encryption Startup Arqit Overstates Its Prospects, Former Staff and Others Say.” On this news, Arqit share price fell $2.57 per share, or 17%, to close at $12.4 per share on April 18, 2022.
Next Steps: If you acquired shares of Arqit Quantum Inc. (ARQQ) f/k/a Centricus Acquisition Corp. between September 7, 2021 and April 18, 2022, or held Centricus securities and were entitled to vote on the merger, you have until July 5, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.