Robbins Geller Rudman & Dowd LLP announces an investigation into potential violations of U.S. federal securities laws by Arqit Quantum Inc. (NASDAQ: ARQQ; ARQQW) focused on whether Arqit and certain of its officers and directors made false and misleading statements and/or failed to disclose material information to investors.
If you have information that could assist in this investigation or if you are an Arqit investor who suffered a loss and would like to learn more, you can provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at firstname.lastname@example.org.
THE COMPANY: Arqit supplies encryption services purporting to make communications secure against current and future forms of attack, including attacks from a quantum computer. On May 12, 2021, Centricus Acquisition Corp. – a special purpose acquisition company (“SPAC”) or blank check company – announced its intended business combination with Arqit Limited. Prior to the merger, Centricus Acquisition Corp. traded under the ticker symbols CENH, CENHU, and CENHW. In Arqit’s investor presentation before the merger’s closing, Arqit’s CEO, David Williams, said that Arqit’s technology can solve the problem of quantum attack “for every connected device in the world and that means that the Arqit business is now suitable for hyperscale growth.”
THE REVELATION: On April 18, 2022, The Wall Street Journal published a story entitled: “British Encryption Startup Arqit Overstates Its Prospects, Former Staff and Others Say.” The Wall Street Journal revealed, among other things, that “Arqit has given investors an overly optimistic view of its future revenue and the readiness and workability of its signature encryption system, according to former employees and other people familiar with the company, and documents viewed.” Specifically, “people familiar with the matter said that the bulk of [Arqit’s committed revenue isn’t from selling its product and that at its public launch, [Arqit] had little more than an early-stage prototype of its encryption system. Several clients [Arqit] lists – including a number of British government agencies – are simply giving Arqit research grants, nonbinding memorandums of understanding or research agreements that come with no funding, not contracts for its encryption product, they said.” The article also reported that “[i]n April 2021, Arqit’s chief revenue officer resigned after raising concerns with [Arqit’s CEO] that he was overstating contracts and giving unrealistic revenue projections to potential investors, people familiar with the matter said.”
On this news, the price of Arqit common stock fell by more than 17%.
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