Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Netcapital Inc. (“Netcapital” or the “Company”) (NASDAQ: NCPL) common stock between December 15, 2021 and September 3, 2026, inclusive (the “Class Period”). Netcapital Inc. investors have until December 7, 2026 to file a lead plaintiff motion.
IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN NETCAPITAL INC. (NCPL), CONTACT THE LAW OFFICES OF HOWARD G. SMITH TO PARTICIPATE IN THE ONGOING SECURITIES FRAUD LAWSUIT.
Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at howardsmith@howardsmithlaw.com, by telephone at (215) 638-4847 or visit our website at www.howardsmithlaw.com.
What Happened?
On August 10, 2026, the SEC filed a complaint against Netcapital and certain senior executives alleging, among other things, that Netcapital was involved in a fraudulent scheme to overstate the revenue of Netcapital. Specifically, from approximately October 2021 through January 2024, Netcapital improperly recorded nearly $14 million in revenue from sham consulting agreements which produced no real revenue for Netcapital. The recognition of this revenue inflated Netcapital’s total revenue by approximately 345%. During this period, investors in Netcapital’s public and private securities offerings invested over $25.6 million.
On this news, Netcapital stock fell $0.05 or 12.82%, to close at $0.35 on August 11, 2026, thereby injuring investors.
Then on August 17, 2026, the Netcapital disclosed that its independent registered public accounting firm, Fruci & Associates II, PLLC, had resigned.
On this news, Netcapital stock fell $0.09 or 28.62%, to close at $0.23 on August 18, 2026, thereby further injuring investors.
Finally on September 3, 2026, after market close, Netcapital disclosed that on Avi Liss had resigned as a member of the Board of Directors, and from all committees of the Board, including the Audit Committee, effective immediately. In his resignation letter, Liss stated that he was resigning “in light of the serious allegations recently asserted against the Company and certain current and former officers, directors, and other individuals” in the SEC Complaint.
On this news, Netcapital stock fell $0.05 per share, or 8.15%, to close at $0.58 per share on September 4, 2026. The following trading day, Netcapital stock fell a further $0.08 per share, or 13.15%, to close at $0.50 per share on September 8, 2026, thereby further injuring investors.
What Is The Lawsuit About?
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Over the Class Period, Netcapital improperly recognized material revenues from what were, in reality, sham consulting agreements with entities controlled by Defendant John Fanning; (2) The consulting agreements were backdated and in some cases forged, and Netcapital Advisors provided little if any meaningful consulting services; (3) The Portfolio Company transactions were improperly undisclosed related-party transactions involving John Fanning; (4) Netcapital’s certifications pursuant to the Sarbanes-Oxley Act of 2002 were false; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
Contact Us To Participate or Learn More:
If you purchased Netcapital Inc. common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Law Offices of Howard G. Smith,
3070 Bristol Pike, Suite 112,
Bensalem, Pennsylvania 19020,
Telephone: (215) 638-4847
Email: howardsmith@howardsmithlaw.com,
Visit our website at: www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com: https://www.businesswire.com/news/home/20261019228061/en/
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