The legal action centers on allegations that Netcapital engaged in sham consulting deals with entities linked to John Fanning. According to the complaint, these agreements were frequently forged or backdated, with the company providing little actual service in exchange for revenue. The suit claims these undisclosed related-party transactions rendered Netcapital’s financial certifications under the Sarbanes-Oxley Act fundamentally false.

Shareholders who suffered losses during the specified period have until December 7, 2026, to file a motion with the court to serve as lead plaintiff. While investors may choose their own counsel, the firm emphasizes that no class has been formally certified yet. Those wishing to participate in the litigation can contact Phillip Kim at The Rosen Law Firm for further details on the recovery process.