#USA #Class Action #Los Angeles #Securities Fraud #Netcapital Inc.

What’s Next for Netcapital Inc. Shareholders?

On November 9, 2026, Glancy Prongay Wolke & Rotter LLP announced the initiation of a class action lawsuit against Netcapital Inc. following a dramatic 28.62% drop in its stock price on August 18, 2026. Investors who purchased shares between December 15, 2021, and September 3, 2026, may be eligible to join the case as they seek to recover losses due to alleged fraudulent activities by the company.

The class action is centered around significant allegations made against Netcapital by the Securities and Exchange Commission (SEC), which asserts that the company misrepresented its financial health over several years. Specifically, it is alleged that Netcapital falsely inflated its revenue by nearly $14 million through sham consulting agreements. These misleading financial reports led investors to believe that the company's profits were far healthier than they actually were, prompting them to invest over $25.6 million into Netcapital's public and private offerings.

Timeline of Events

Key developments leading to the stock’s decline began on August 10, 2026, when the SEC filed a complaint regarding the alleged fraudulent behavior of Netcapital and some of its executives. The U.S. District Court in Massachusetts received the filing on October 8, 2026, with the case designated as Chance v. Netcapital Inc. et al. Following the complaint, Netcapital's stock fell sharply, closing at $0.35 per share, a decline of 12.82%. These losses were compounded when the company's independent accounting firm resigned shortly thereafter, resulting in further stock depreciation to $0.23 per share—marking a staggering total loss of 28.62% in just a few days.

The cherry on top was the announcement of the resignation of Avi Liss from the Board of Directors amid these serious allegations. Following his resignation, the stock witnessed yet more declines, further exacerbating investors' losses. By September 8, 2026, shares dropped to $0.50, indicative of the alarming trend affecting investor confidence.

Allegations Against Netcapital Inc.

The complaint against Netcapital lays out several critical points, alleging that the company:
1. Recorded revenues from consulting agreements that provided no real value to the company.
2. Engaged in backdating and forgery when it came to these consulting contracts.
3. Failed to disclose material facts about related-party transactions.
4. Provided false certifications under the Sarbanes-Oxley Act.

The lawsuit underscores the claim that throughout the class period, Netcapital misled investors regarding its operational and financial practices, potentially leading to the enormous stock drop. Investors now find themselves in a situation where they must decide whether to participate in the class action or remain as absent class members.

Next Steps for Investors

For those affected by the turbulent events related to Netcapital Inc., the next crucial date is December 7, 2026. Investors wishing to assume a lead plaintiff role in the class action must file motions by this deadline. Glancy Prongay Wolke & Rotter LLP is prepared to assist investors throughout this process, emphasizing that participation is on a contingency basis—meaning attorneys’ fees are covered only from a successful recovery.

The implications of the lawsuit and the continuing fallout from the SEC’s allegations provide a complex situation for current and potential investors of Netcapital Inc.. Legal counsel has suggested that anyone who bought shares within the specified timeframe should consider taking action, as their financial interests may be directly impacted.

For more information or to express interest in joining the class action, investors can visit the Netcapital Inc. case page or contact Glancy with inquiries. Understanding one's rights and options during these significant market fluctuations is crucial for all stakeholders involved in this considerable financial upheaval.