Jing Jing v. Weyland Tech, Inc.

Shareholder Duan Jing Jing (plaintiff) sued Weyland Tech, Inc. (Weyland) and the Nevada Agency and Transfer Company (NATC) (defendants) for refusing to remove a restrictive legend from her stock certificate. Jing Jing purchased her shares from another person in April 2016. Weyland issued a stock certificate with a restrictive legend preventing sale of the shares. Weyland’s chief executive officer said Weyland would re-issue the shares as nonrestricted after a six-month holding period. More than eight months later, Jing Jing had an attorney prepare a legal opinion to start the process of removing the legend per Weyland’s instructions. The opinion letter and all other documents required to transfer the shares were sent to NATC, including Jing Jing’s original share certificate. Weyland’s attorney responded that the legend could not be removed because the shares were previously canceled. Jing Jing requested her original certificate back, then hired a second attorney who wrote another opinion letter and sent NATC everything necessary to transfer the shares but included a copy of the stock certificate instead of the original. Weyland again refused to remove the legend, claiming a complaint from a Singapore court said the shares originally issued to the person Jing Jing bought them from had been canceled. But Jing Jing’s attorney found no record of a Singapore complaint in Weyland’s U.S. regulatory filings and renewed efforts to remove the legend. The transfer company repeatedly refused to do so without the original stock certificate. Jing Jing sued for conversion and violation of Delaware law requiring issuers to register transfers, requesting both the value of her shares and injunctive relief to compel Weyland to remove the restrictive legend. Weyland and the transfer company moved to dismiss for failure to state a claim. Meanwhile, Jing Jing amended her complaint to add that she properly presented the original certificate and other required documents to the transfer company in January 2017.