Shareholder Investigation of Dynagas

Dynagas LNG Partners (DLNG) Accused of Misleading Investors Regarding Two Key Long-Term Contracts

According to the filed complaint, against Dynagas LNG Partners (NYSE: DLNG) for alleged violations of the Securities Exchange Act of 1934 between February 16, 2018 and March 21, 2019, since its 2013 IPO, Dynagas LNG Partners (DLNG) attracted investors by paying a substantial quarterly distribution. Dynagas routinely touted its long-term charter contracts and reminded investors of the predictable nature of revenue. However, starting in early 2018, Dynagas began misleading investors regarding the new distribution rate. In a February 2018 conference call, CEO Tony Lauritzen falsely assured investors that the new distribution rate would be consistent and sustainable for a long time. Contrary to his assurances, Dynagas knew that its steady, predictable cash flow would be reduced in 2018 and for years thereafter. On November 15, 2018, Dynagas disclosed that two of its vessels entered extended charter contracts at “lower rates compared with the previous charter contracts.” On this news, Dynagas’s stock fell $1.07, or over 13.7%. Then on January 25, 2019, the magnitude of the fraud was further revealed when Dynagas announced that it would be cutting its quarterly distribution by 75% as it was “necessary in order to retain more of the cash generated from the Partnership’s long term contracts to maintain a steady cash balance.” On this news, Dynagas’ stock fell $1.11, or over 27.6%, to close at $2.91 per share on January 26, 2019, and has continued to fall.

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