Rigrodsky Law, P.A. is investigating potential claims against the officers and directors of iFresh, Inc. ("iFresh" or the "Company") on behalf of stockholders. A complaint has been filed by the United States Securities and Exchange Commission ("SEC") against iFresh and its founder and Chief Executive Officer, Long Deng ("Deng"). According to the complaint, iFresh and Deng misled the investing public about iFresh’s finances by hiding and misstating information about related party transactions that iFresh entered into with entities owned and controlled by Deng and his brother.
The SEC rules require public companies, like iFresh, to disclose all related party transactions that exceed $120,000 in their public filings. In addition, generally accepted accounting principles require companies to disclose material related party transactions.
Between August 10, 2016, when iFresh filed its initial registration statement, through August 13, 2020, when it filed its Form 10-K for the fiscal year ending March 31, 2020, iFresh engaged in numerous transactions with entities related to Deng. However, iFresh did not properly disclose all of its related party transactions. As a result, iFresh’s public filings were materially misstated in 2016, 2017, 2018, 2019, and 2020. Between 2016 and 2020, iFresh failed to disclose over $12 million in payments to a company owned by Deng’s brother. By misrepresenting information about its related party transactions, iFresh deprived investors of a true picture of how heavily iFresh and Deng’s business interests were intertwined.