Kaspien Holdings Inc. (NASDAQ: KSPN): Investigating Claims
The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended Kaspien Holdings Inc. to investors.
What is Kaspien Holdings Inc.?
Kaspien Holdings, Inc. (formerly Trans World Entertainment) is an American company that provides software and services for ecommerce.
In December 2023, Kaspien Holdings Inc., an online retailer based in Spokane Valley, WA, reportedly announced plans to close its operations within months. Originally founded as Etailz in 2008 and rebranded in 2020, the company had experienced significant growth, hitting $1 billion in sales during the pandemic in 2021.
However, the company has struggled financially in recent years, with stock prices plummeting from a peak of $46 per share in early 2021 to just $0.02 per share recently. Kaspien reported a significant revenue decline and net losses in 2023, prompting the decision to delist its stock by January 8 and lay off nearly all its employees.
In July 2022, Kaspien Holdings Inc. offered shares of its common stock for sale to investors. As of February 28, 2024, the average post offering return was –99.61%. The company’s common stock was traded on the Nasdaq Capital Market, or NASDAQ, under the symbol “KSPN.”
Risks Associated with Small Stock Offerings
Lack of Information: Many small companies may not provide comprehensive financial disclosures or have limited operating histories.
Market Volatility: Small stocks can be more volatile than larger, established companies, leading to significant price fluctuations.
Liquidity Concerns: These stocks may have low trading volumes, making it difficult to buy or sell shares at desired prices.
Broker Due Diligence
Broker due diligence is a process undertaken by brokerage firms to ensure they are recommending and selling investment products appropriate for their clients. This process protects the interests of the brokerage firm and its clients by ensuring that the investments offered are suitable for the client’s investment objectives, risk tolerance, and financial situation.
If a broker or brokerage firm makes an unsuitable investment recommendation or fails to disclose the associated risks adequately, they may be found liable for investment losses in a FINRA arbitration claim. Fortunately, FINRA provides an arbitration forum for investors to resolve such disputes.
Class Action vs. Individual FINRA Arbitration Lawsuit
You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration case. The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option. Class actions as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.
Free Consultation
If you have suffered investment losses in Kaspien Holdings Inc., you may have recovery options. The securities attorneys at The White Law Group offer free consultations and can be reached at 1-888-637-5510.
About The White Law Group
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. The firm represents investors across the country in claims against their brokerage firms.
Last modified: August 16, 2024
