NEW YORK (TheStreet) -- InterCloud Systems (ICLD - Get Report) plunged 33.2% to $6.90 at 10:59 a.m. on Friday after The Rosen Law Firm announced it had begun an investigation into the company for possible securities fraud claims.
The law firm is looking into claims that InterCloud may have paid outsiders to increase its stock by publishing false and misleading articles. According to the law firm's press release, the articles in question appeared in Fall 2013 from John Mylant and "Kingmaker," who supposedly ran a volatility trading group. The two praised InterCloud's stock in their articles.
On March 13, an article posted on Seeking Alpha cited emails allegedly from Mylant stating that he was a paid promoter who worked with companies that employed him to favorably publicize said companies while claiming that he was independent from them. After trading hours on March 17, journalist Roddy Boyd claimed that DreamTeam Group, a stock promotion firm, works with writers like Mylant to craft misleading campaigns in the press and that it had done so with InterCloud.
On March 13 and 18, InterCloud's stock price fell $1.19 and $1.28 a share, respectively.
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