The U.S. Securities and Exchange Commission has launched a lawsuit against a Rhode Island-based investment advisor and his company, alleging they orchestrated a $1.4 million pump-and-dump scheme involving BioVie Inc., a purported drugmaker.

In its Friday filing in Manhattan federal court, the SEC accused David Banister, 59, and his company, The Market Analysts Group LLC, of manipulating trading prices for BioVie shares between December 2020 and March 2021. According to the SEC, Banister used his company’s subscription-based stock advisory platform and his popular Stocktwits account to mislead investors.

"Defendants promoted BioVie to investors — encouraging them to buy and hold the stock — while concealing Banister's plans to sell his own BioVie shares," the SEC alleged.

Misleading Promotion

The SEC claims Banister misrepresented trading spikes in BioVie’s stock, attributing the increases to market demand without disclosing that his own purchases were driving the price surges. The Market Analysts Group, which boasted Banister as "one of the top market forecasters in the world," reportedly lured investors into overpaying for BioVie shares.

Banister and his firm also targeted over 60,000 followers on Stocktwits, directing them to invest in BioVie shares while Banister planned to sell his holdings at inflated prices. The alleged scheme netted Banister $1.37 million while leaving other investors with significant losses, according to the SEC.

Investor Harm

The SEC emphasized that the manipulation created artificial demand for BioVie stock, harming investors who trusted Banister’s advice. The publicly traded company, listed on the Nasdaq stock exchange, is reportedly focused on therapies for neurological disorders and liver disease.

The SEC has filed its case in the U.S. District Court for the Southern District of New York, seeking penalties and potentially barring Banister from future securities trading.

SEC representatives Sheldon L. Pollock, Michael D. Paley, Paul G. Gizzi, Jessica Quinn, and Laura Yeu are handling the case. The defendants' legal representation was not immediately available for comment.

The case is titled Securities and Exchange Commission v. Banister et al., case number 1:24-cv-09308.

This lawsuit underscores the SEC’s ongoing efforts to combat fraudulent practices in the stock market and protect unsuspecting investors. BioVie Inc., which is not accused of wrongdoing, continues to operate as a clinical-stage pharmaceutical company.