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Responding to the recent class action lawsuit filed in the US District Court, Greek shipowner DryShips said the complaint was without merit.

On July 14, 2017, a purported class action complaint was filed in the New York District Court by Maxime Hodges and other investors against the company and two of its executive officers. The complaint alleges that the company and two of its executive officers violated the Securities Exchange Act of 1934, and are claiming damages.

“DryShips and its management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations,” the company said.

To remind, DryShips has been accused of a stock-manipulation scheme aimed at artificially inflating its share price.

The transactions trace back to June 8, 2016, when DryShips raised hundreds of millions of dollars by selling newly-issued shares directly to Kalani Investments Ltd. (Kalani), a British Virgin Islands firm, at a discount to market value. It is claimed that the new capital enabled DryShips to roughly double the size of its fleet to 36 vessels.

On the other hand, Kalani is believed to have bought the shares with the intention of reselling and had failed to register as an underwriter with the U.S. Securities & Exchange Commission.

The issuance of shares caused the dropping of diluted shareholder value, while the frequent fluctuation in DryShip’s common share price, caused by the company’s capital-raising, reportedly cost the shareholders hundreds of millions of dollars, according to the lawsuit.

Pomerantz LLP, Goldberg Law PC, Gainey McKenna & Egleston and Stull, Stull & Brody (SS&B) are among the lawfirms that joined the class action lawsuit.