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Biotech Ginkgo sued over revenue statements for $15 bln SPAC deal

  • Suit follows Ginkgo’s September SPAC merger
  • Investor cites brief vendor report that sparked DOJ probe

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(Reuters) – Ginkgo Bioworks Holdings Inc has been hit with a shareholder suit claiming it mispresented its revenue sources in statements about its $15 billion merger with a clean verify firm.

Shareholder Kevin Stuart sued the biotechnology firm and particular function acquisition firm Soaring Eagle Acquisition Corp in an Oakland, California, court docket on Thursday.

The criticism was filed three days after Ginkgo disclosed in its third quarter report that it obtained an “informal probe” from the U.S. Department of Justice over monetary misconduct allegations made by a brief vendor.

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Ginkgo stated in a Nov. 15 press launch {that a} Milbank-led investigation discovered that the brief vendor’s accusations have been “unfounded and that no restatement of Ginkgo’s financials was needed.”

SPACs elevate funds by means of preliminary public choices to merge with non-public firms and take them public.

Boston-based Ginkgo and Soaring Eagle introduced in May that they’d inked a deal that valued Ginkgo at $15 billion and would produce as much as $2.5 billion in proceeds. Soaring Eagle is the seventh SPAC led by former Metro-Goldwyn-Mayer chairman Harry Sloan and ex-CBS Entertainment president Jeff Sagansky, in line with an April press launch.

Citing brief vendor Scorpion Capital’s October report in regards to the firm, Stuart’s criticism accused the corporate, SPAC and its executives of making an attempt to hide that almost all of Ginkgo’s revenue was generated by means of different entities it created, funded or managed and never by means of third-party prospects. The investor additionally stated that the corporate’s valuation was considerably decrease than disclosed.

Laurence Rosen of the Rosen Law Firm, who’s representing Stuart, didn’t reply to a request for touch upon Friday. Representatives for Ginkgo and Soaring Eagle declined to touch upon authorized proceedings.

The case is Kevin Stuart v. Ginkgo Bioworks Holdings Inc et al, U.S. District Court for the District of California, Northern District, No. 4:21-cv-08943.

For Stuart: Laurence Rosen of the Rosen Law Firm

Counsel data for Ginkgo and Soaring Eagle was not instantly recognized.

Read extra:

Biotech agency Ginkgo to merge with Harry Sloan-led SPAC in $17.5 bln deal

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Sierra Jackson

Sierra Jackson reviews on authorized issues in main mergers and acquisitions, together with deal work, litigation and regulatory adjustments. Reach her at sierra.jackson@thomsonreuters.com

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