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Written by 3:44 pm Blog, Securities Fraud Articles

Investor Alert: Servergy Inc Securities Fraud Investigation

Did you suffer investment losses investing in Servergy Inc.? If so, the securities attorneys of The White Law Group may be able to help you recover your losses in a FINRA arbitration claim against the brokerage firm that recommended Servergy to you.

According to a SEC press release, the SEC has alleged that Servergy Inc and the company’s former CEO misled investors in the sale of $26 million worth of company stock. Allegedly, Servergy touted the energy efficiency of the company’s sole product, the Cleantech CTS-1000 server, saying it would replace “power-hungry” servers and could compete with industry giants like IBM and Hewlett Packard. However, Servergy allegedly failed to inform investors that CTS-1000 had a less powerful 32-bit processor that was being phased out of the industry and could not compete with the new high-performance servers with 64-bit processors being manufactured by other companies.

According to the SEC announcement, Servergy agreed to pay a $200,000 penalty to settle the SEC’s charges.

The White Law Group is investigating the liability that some brokerage firms may have for recommending Servergy to investors. Private offerings, like Servergy, are often exempt from registration. In general, unregistered securities are inherently risky due to the lack of regulatory oversight. Compared to more traditional investments such as stocks or mutual funds, these investments are generally more complexly structured and typically considered high-risk products.

Brokerage firms that sold private offerings of Servergy had a fiduciary duty to perform the necessary due diligence to determine whether the investment had a reasonable likelihood of success. They also had an obligation to adequately disclose the risks associated with the investment and to take the necessary steps to determine if the investment was in line with the client’s risk tolerance, investment objectives and financial needs.

If a broker dealer mislead investors or overlooked suitability requirements when reccomending Servergy to clients, the firm may be liable for investment losses.

If you invested in Servergy Inc and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.

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