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Moko Social

Kurta Law is investigating investments in Moko Social Media (NASDAQ: MOKO). Moko was a high-risk investment that would have been unsuitable for most investors. Our attorneys believe financial professionals who recommended this investment may have violated securities laws.

In 2015, Moko Social Media conducted an initial public offering of American Depository Shares (ADS). These were equity shares of a non-U.S. company. “Equity” refers to a company’s assets minus its debts.

Securities Laws and Recommendations of Risky Securities

Regulation Best Interest requires brokerage firms to exercise reasonable care and skill when they approve securities for recommendation to clients. Brokerage firms also owe their customers due diligence and therefore should have been aware of the risks associated with Moko stocks.  The risks associated with a Moko Social Media investment were clearly stated in the company’s prospectus. Investors should not have to withstand losses if they expressly stated they wanted moderate to conservative investments, or if their age or retirement status made risky investments qualitatively unsuitable.

What is Moko Social Media?

MOKO Social was a social media platform that catered to niche interests: collegiate intramural sports, running, and progressive politics. According to the prospectus, it started in Australia and eventually arrived in the U.K., the U.S., and parts of Southeast Asia.

Risks Listed in the Company Prospectus

Moko disclosed in its SEC filing, “Investing in the ADSs involves a high degree of risk.”

Here are a few examples of what made this investment so risk:

  • Our auditors have issued a ‘going concern’ emphasis of matter qualification regarding their opinion on our financial statements, indicating the existence of a material uncertainty that raise substantial doubt that we can continue as an ongoing business for the next 12 months.
  • There can be no assurance that our current cash reserves and anticipated revenues will be sufficient to enable us to reach a cash-flow positive position or fully finance our business plan.
  • If we cannot continue as a viable entity, our shareholders may lose some or all of their investment in us.

Moko’s Continuing Losses

The company did indeed fail to generate sufficient revenue. Moko’s 2016 20F filing revealed losses of $16 million in the U.S. The company suffered similar losses in 2015. In 2016, NASDAQ delisted the company after the total value of its securities fell below the $50,000,000 minimum required by the stock exchange. Moko entered administration in 2016. Deloitte, a company that specializes in restructuring, took over Moko Social Media to sell off parts of the business.

Did an Aegis Broker Sell You Shares of Moko?

Aegis Capital Corp served as the underwriter for this offering. Underwriters take on the risk of bringing shares to market in exchange for a fee. Our attorneys have learned that Aegis earned a significant fee of 7%. If you believe an Aegis broker did not consider your best interests when recommending shares of Moko, you may have a case for an investment fraud lawyer.

What Can I Do If I Lost Money on Moko Social Media?

Investors in Moko Social Media should consider speaking with a securities attorney to determine if they have a case. Our attorneys offer free case evaluations and only collect a fee if we win your case. Contact us today to discuss: (877) 600-0098 or info@kurtalawfirm.com.