Dataram Corporation

Kurta Law is investigating brokers who recommended shares of Dataram Corporation to their investors. These recommendations may have been unsuitable, meaning they did not fit the investor’s risk profile. Unsuitable investment recommendations violate FINRA Rule 2111 and are a form of broker misconduct.  

If your broker engaged in misconduct, you may have a case for FINRA arbitration. Most investment contracts contain a pre-dispute arbitration clause that requires you to go through FINRA arbitration instead of suing in civil court. In this type of arbitration, your complaint will be reviewed by a panel of purportedly unbiased arbitrators. This is a niche process, and you may benefit from the assistance of a securities attorney. You can call our office for a free case evaluation today: (877) 600-0098 or info@kurtalawfirm.com.  

What is Dataram Corporation?  

According to its prospectus, Dataram Corporation is a developer, manufacturer, and marketer of large-capacity memory products used in high-performance network servers and workstations. Dataram Corporation purportedly also provides customized memory solutions for original equipment manufacturers (OEMs).  

Dataram Corporation Stock Offering  

The prospectus dated May 11, 2011, describes the Dataram Corporation’s offering of 1,775,000 shares of common stock and warrants to purchase 1,331,250 shares of common stock. 

• A prospectus is the document that offerors file with the SEC to register their offering of securities. The prospectus describes the company’s business, financials, as well any risks associated with the offering.  
• Warrants are contracts that give the owner the right to buy or sell a stock by a specified deadline.  

According to the prospectus, there is no public trading market for the warrants, and Dataram Corporation did not expect one to develop.  

Risk Factors  

The following risk factors were disclosed in the prospectus, meaning any brokerage firm that offered these stocks would have been aware of these risks. This is a summary – you can see the complete list on page S-3 of the prospectus.  

Risks Related to Dataram Corporation’s Financial Condition  

The development of a new product line requires substantial capital investment. If there is a delay in raising funds, Dataram Corporation could suffer a serious setback.  

Working Capital Requirements  

The prospectus discloses that Dataram Corporation has vacillated between oversupply and shortage. When a shortage happens, Dataram Corporation must invest substantial working capital resources into building and maintaining inventory.  

Important Customers 

Dataram Corporation relies on business from certain customers. During 2010, one customer accounted for 11% of the company’s revenue. If they lose an important customer, it could drastically affect their revenue.  

Possible Narrowing Market for Products  

Personal computers are increasing in their power and can complete some of the tasks that previously had to be completed by workstations. This will reduce the market for Dataram Corporation’s products.  

Warrants Not Immediately Exercisable 

Warrants are not immediately exercisable, and they may have no value when they become exercisable in six months.  

Aegis Capital Corp. Underwriting    

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help  

Investors should not tolerate financial losses resulting from broker fraud or misconduct. Our attorneys are experts on securities fraud and FINRA arbitration. Do not hesitate to reach out if you have questions about the process – we do not collect a fee unless we win your case.