Investors Target Netcapital Inc. in Securities Fraud Class Action

A class action lawsuit filed against fintech firm Netcapital Inc. alleges a systematic scheme to inflate revenue through forged and backdated consulting agreements. The complaint targets activity occurring between December 15, 2021, and September 3, 2026, centering on undisclosed transactions linked to company insider John Fanning.

Corp and Tech·October 12, 2026·reads: 1,243

The legal action, led by the firm Robbins LLP, follows a series of disclosures that triggered sharp declines in Netcapital’s share price. According to the complaint, the company improperly recognized revenue from sham agreements with entities controlled by Fanning, rendering its Sarbanes-Oxley certifications misleading. The litigation gained momentum after the SEC filed its own charges on August 10, 2026, alleging widespread financial deception involving at least eleven portfolio companies.

Market confidence eroded further throughout August and September 2026 as the company faced a cascade of negative developments. Following the SEC’s intervention, the stock dropped nearly 13%. Further volatility ensued when the company’s independent auditor, Fruci & Associates II, PLLC, resigned, and director Avi Liss subsequently stepped down from the board and audit committee. These events collectively wiped significant value from the stock, prompting the current push for lead plaintiff status.

Investors who purchased shares during the designated period have until December 7, 2026, to move for lead plaintiff appointment. Participation in the class action does not require upfront costs, as the firm operates on a contingency fee basis.