Megan Holdings faces class action after 93% stock collapse

A securities class action targets Megan Holdings Limited (NASDAQ: MGN) over an alleged pump-and-dump scheme that erased 93.4% of the stock's value in a single day.

"Behind everything we do is the belief that companies should be governed responsibly, fiduciaries should be held accountable, and shareholders deserve transparency and fairness," Brian J. Robbins, founding partner at Robbins LLP, said.

The complaint alleges MGN shares fell $3.96 to close at $0.28 on March 26, 2026, after closing at $4.24 the prior session. The stock had been driven up more than 400 percent from $1.23 on February 25 to an intraday high of $5.18 on March 25, according to the complaint, which attributes the run-up to social-media misinformation and individuals impersonating financial professionals.

Investors seeking appointment as lead plaintiff must submit papers to the court by September 4, 2026. The lawsuit covers securities purchased between September 26, 2025 and March 25, 2026, or shares acquired in connection with the company's September 26, 2025 initial public offering.

The complaint names Megan Holdings, CEO and Executive Director Darren Hoo, who controlled about 61.97 percent of ordinary shares after the IPO, and CFO Ng Kai Tie. It also alleges the sole IPO underwriter, D. Boral Capital LLC, had conducted numerous microcap IPOs that suffered similar volatility-driven declines, including Park Ha Biological Technology, which fell 94 percent, and Masonglory Limited, down 97.6 percent from its peak. Phoenix Asia Holding surged from $12.35 to $133.12 in a single day before collapsing to $17.60 the next session, the complaint said.

The company, a Cayman Islands holding company engaged in shrimp aquaculture in Malaysia, failed to disclose material weaknesses in its internal accounting and financial reporting controls, the complaint alleges. Its IPO disclosures also did not adequately address risks tied to the alleged manipulation, which the company's own risk factors acknowledged had hit comparable small-cap listings.

The stock has continued to trade below $0.28 since the collapse, according to the complaint. The September 4 deadline marks the first procedural test of the case, with the court expected to appoint a lead plaintiff to direct the litigation. Investors who bought MGN shares during the class period and suffered losses may be eligible to participate in any recovery, and the outcome could set a precedent for how issuers and underwriters are held accountable for manipulation tied to microcap listings.

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