Cronos Group $10 Million Securities Class Action Settlement

Investors who purchased or otherwise acquired publicly traded common stock of Cronos Group Inc. on the Nasdaq or another public U.S. market between May 9, 2019, and March 30, 2020, may be eligible to claim a cash payment from a class action settlement.

Cronos Group agreed to pay $10 million to settle a securities class action lawsuit alleging it and certain executives made false and misleading statements about its revenue. The lawsuit claimed Cronos improperly recognized revenue from three round-trip transactions, leading to restatements that reduced its revenue for the first and third quarters of 2019.

Who can file a claim?

The settlement includes all persons and entities, regardless of country of residence, who purchased or otherwise acquired publicly traded Cronos Group Inc. common stock on the Nasdaq or any other public U.S. market between May 9, 2019, and March 30, 2020, inclusive, and suffered damages as a result.

Additional details

• Both individuals and entities can be class members.
• The settlement includes investors who held shares directly and those who held through a broker or other nominee.
• The actual beneficial owner or a legal representative must submit the claim.
• Joint owners must each sign the claim form.
• Executors, administrators, guardians, conservators and trustees may submit claims on behalf of others but must provide documentation proving their authority.
• Claimants must submit a separate claim form for each account.

How much can class members get?

The total settlement fund is $10,000,000. The amount each class member will receive depends on several factors:

• The number and value of valid claims submitted
• The number of shares purchased or acquired during the class period
• The timing of each purchase, sale and holding
• The total recognized claims of all claimants

The settlement administrator will distribute payments on a pro rata basis according to the court-approved plan of allocation:

• The estimated average recovery per eligible share is approximately $0.06 before deductions for attorneys' fees, litigation expenses, taxes and administration costs. The estimated average recovery after these deductions is approximately $0.04 per share.
• Actual payments may be higher or lower depending on individual claims and the total number of valid claims.
• The settlement administrator will calculate each class member's payment based on the recognized loss amount assigned to each share.
• Recognized loss amounts depend on purchase and sale timing. The settlement administrator will calculate them using the court-approved plan of allocation.
• For shares sold before Feb. 24, 2020, the recognized loss is $0.
• For shares sold from Feb. 24, 2020, through March 30, 2020, the recognized loss is the lesser of the artificial inflation at purchase minus the artificial inflation at sale (Table 1 on Page 17 of the settlement notice) or the purchase price minus the sale price.
• For shares sold from March 31, 2020, through June 26, 2020, the recognized loss is the lesser of the artificial inflation at purchase, the purchase price minus the average closing price through the sale date (Table 2 on Page 18 of the settlement notice) or the purchase price minus the sale price.
• For shares held as of the close of trading on June 26, 2020, the recognized loss is the lesser of the artificial inflation at purchase or the purchase price minus $6.11 (the average closing price from March 31, 2020, through June 26, 2020).
• The settlement administrator will set any recognized loss that calculates to a negative number to $0.

• If total recognized claims exceed the fund, the settlement administrator will reduce payments on a pro rata basis.
• Class members whose payment would be less than $10 will not receive a payout.

How to claim a Cronos securities class action settlement payment

Class members may file a claim online or download, print and complete the PDF claim form and mail it to the settlement administrator. The claim deadline is Nov. 9, 2026.

Settlement administrator's mailing address: Cronos U.S. Securities Settlement, c/o A.B. Data Ltd., P.O. Box 173088, Milwaukee, WI 53217

Proof or documentation required to submit a claim

All class members must provide the last four digits of their Social Security number or taxpayer identification number. They must also provide holdings and transaction information, including:

• Number of shares held as of May 9, 2019
• Trade dates for purchases and sales from May 9, 2019, through June 26, 2020
• Number of shares purchased, acquired or sold
• Total purchase, sale or acquisition price
• Number of shares held as of June 26, 2020

Class members must also provide documentation to support their transactions in Cronos common stock. Acceptable proof includes:

• Broker confirmation slips
• Broker account statements
• Authorized statements from a broker containing the transactional information found in a confirmation slip

Payout options

• Physical check

$10 million settlement fund

The $10,000,000 settlement fund includes:

• Settlement administration costs: To be determined
• Attorneys' fees: Up to $3,300,000
• Attorneys' expenses: Up to $200,000
• Payments to eligible class members: Remainder of the fund

Important dates

• Opt-out deadline: Oct. 29, 2026
• Deadline to file a claim: Nov. 9, 2026
• Fairness hearing: Nov. 19, 2026

When is the Cronos securities class action settlement payout date?

The settlement administrator will issue payments after it completes processing and the court resolves any appeals and grants final approval to the settlement.

Why did this class action settlement happen?

The class action lawsuit alleged Cronos Group, Michael Gorenstein and Jerry F. Barbato made false and misleading statements about the company's revenue. The plaintiffs claimed these statements inflated Cronos' stock price and caused investor losses when corrective information entered the market in February and March 2020.

The defendants denied all allegations of wrongdoing but agreed to settle to avoid the burden, expense, uncertainty and risk of further litigation.

Sources

1. Claim form
2. Class notice