The filing of AI-Washing related securities suits is by now a well-established phenomenon. But a securities suit filed earlier this week presents an interesting new variant on this phenomenon. The new lawsuit alleges that the defendant company used the announcement of a supposed AI-related “collaboration” with Microsoft allegedly to “pump” the company’s share price just before disclosing an at-the-market private placement. As discussed below, the new lawsuit is just the latest in a recent series of securities class action lawsuits alleging share price pumping schemes.

Background

Richtech Robotics describes itself as a “robotics and artificial intelligence (‘AI’) technology company focused on developing advanced embodied AI systems that aims to improve the efficiency and productivity of U.S. businesses.”

On January 27, 2026, the company issued a press release announcing “a hands-on collaboration with Microsoft through the Microsoft AI Co-Innovation Labs to jointly develop and deploy agentic artificial intelligence capabilities.” Among other things, the press release referred to a “joint engineering effort” between the two companies.  According to the subsequently filed securities lawsuit complaint, the company’s share price rose over 44% on this news.

On January 28, 2026, at 8:00 AM EST, Richtech issues a press release announcing a $38.7 million private placement priced at-the-market. According to the announcement, the private placement was expected to close on January 29, 2026.

On January 29, 2026, Hunterbrook Media (a media outlet affiliated with Hunterbrook Capital, which sometimes acts as a short seller) published a report entitled “Breaking: Microsoft Denies Partnership with Richtech Robotics.” Among other things, the report claimed that the agreement with Richtech was a “standard” customer program with “no commercial element.” Instead, the program Richtech entered is “available to any customers/partners looking to implement Microsoft’s AI tools.”

The report noted that the company’s Microsoft program press release had increased Richtech’s market cap by $370 million, just before the announced at-the-market private placement. Depending on when the private placement agreement was signed, the report said, the price spike was either a “pump” baked into the price calculation for the private offering, or, if the private placement agreement was signed before the Microsoft announcement, the subsequent soaring share price meant the institutional investor in the placement is “now sitting on immediate paper gains.” On this news, the company’s share price declined 20.87%, and the next day fell a further 10.9%.

The Lawsuit

On February 2, 2026, a plaintiff shareholder filed a securities class action lawsuit in the District of Nevada against the company and certain of its directors and officers. A copy of the complaint can be found here. The complaint purports to be filed on behalf of investors who purchased the company’s shares between January 27, 2026, and 12:00 pm EST on January 29, 2026.

The complaint alleges that during the relatively brief class period, the defendants made false or misleading statements or failed to disclose that “(1) Richtech claimed that it had a collaborative and commercial relationship with Microsoft when it did not; and (2) as a result, Defendants’ statements about Richtech’s business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all times.”

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Act of 1934 and Rule 10b-5 thereunder. The complaint seeks to recover damages on behalf of the plaintiff class.

Discussion

This lawsuit has only just been filed and it remains to be seen how it will fare. The Hunterbrook report states on its face that Hunterbrook capital held a short position in Richtech Robotics shares. As I have noted in prior post on this site (most recently here), there arguably are reasons, in light of the financial incentives involved with short sellers, to be wary of securities lawsuit allegations based solely on a short seller’s report.

What is apparent is that this company clearly sought to burnish its AI-related credentials by promoting the existence of the supposed Microsoft relationship. The whole point of the company’s press release was to try to enhance the perception of the company’s supposed AI-related capabilities and prospects. To the extent the company overstated or misrepresented the extent of the company’s supposed relationship with Microsoft, the as-yet unproven allegations represent a classic example of alleged AI-washing.

The interesting variation in this lawsuit on the classic AI-washing allegations has to do with the added fact of the alleged share price “pump.” The fact is that just hours after announcing the supposed Microsoft “collaboration,” the company announced the at-the-market private placement. Depending on the timing of the company’s agreement with the institutional investor about the private placement – at least according to the Hunterbrook report – the company either managed to “pump” the price calculation for the placement transaction or to allow the placement investor to reap paper gains due to the “pump.”

The price “pump” allegations are interesting to me as this new suit is just the latest new securities class action lawsuit filed in just the last few days with key allegations asserting that the defendant company allegedly engaged in stock price manipulation.

For example, on January 30, 2026, a plaintiff shareholder filed a securities class action lawsuit in the Southern District of New York against China Liberal Education Holdings, Ltd. alleging that the company and certain of its executives and related parties engaged in a social-media driven scheme to pump the defendant company’s share price, in what the complaint describes as a classic pump and dump scheme. The complaint in the China Liberal Education Holdings lawsuit can be found here.

In addition, on February 2, 2026, a plaintiff shareholder filed a securities class action lawsuit in the Southern District of New York against Picard Medical, Inc., certain of its directors and officers, and its offering underwriters, alleging that the defendants engaged in “an illicit social-media-based promotion scheme that artificially inflated its price.” The complaint in the Picard Medical lawsuit can be found here.

The China Liberal Education Holdings  and the Picard Medical cases of course do not involve the kind of AI-washing related allegations contained in the new lawsuit against Richtech Robotics. And the stock price “pump” scheme alleged in the Richtech lawsuit do not involve the kind of social media related allegations alleged in the China Liberal Education Holdings and Picard Medical lawsuits. However, all three of the lawsuits involve allegations of schemes to “pump” the defendant companies’ respective share prices.

The quick filing of these recent lawsuits with a very short time frame suggests at least a couple of things. First, there seems to be a research surge of supposed activities intended to manipulate companies’ share prices. Second, these kinds of activities appear likely to result in follow-on securities class action litigation.

These two related developments can only be viewed with alarm by D&O underwriters, especially to the extent the follow-on suits involve the type of smaller public companies that are generally assumed to be flying below the plaintiffs’ lawyer’s radar. In general, small market publicly traded companies are perceived as lower risk. However, these latest suits underscore the fact that these kinds of companies are by no means risk-free and that in some cases smaller publicly traded companies may be susceptible to alleged stock price manipulation schemes.

A related note about the China Liberal Education Holdings and Picard Medical cases is that they both allegedly involve social media-driven stock price manipulation schemes, which serves as a reminder that ubiquitous social-media tools can be used as stock price manipulation devices, perhaps suggesting an area of underwriting inquiry concerned with applicant company’s social media practices and controls.

One final note about the Richtech Robotics case is just the observation that in the current environment when perceived AI opportunities can drive share prices, companies with AI-related prospects may seek to promote their AI-related prospects as a way not only to raise their profile but also as a way to promote their share price, clearly an important element in assessing companies’ AI-related risks.