Decision Diagnostics Corp., a biotechnology company based in California, and its CEO Keith Berman, are facing fraud charges filed by the U.S. Securities and Exchange Commission (SEC).
According to the Commission, its complaint against Decision Diagnostics and Berman arises from their false and misleading statements that the firm developed a COVID-19 blood testing device.
The defendants allegedly claimed in numerous press releases that their device can accurately detect Covid-19 through a quick finger-prick blood test. They claimed that it only takes a minute to get the test result.
Decision Diagnostics and Berman also allegedly made false and misleading statements that they are progressing towards obtaining an emergency use authorization for their Covid-19 blood testing device from the Food and Drug Administration (FDA). They created a misleading impression that they will soon introduce the device to the market.
The defendants published their claims between March 2020 and June 2020 when they had no proven method for detecting COVID-19 and had no physical blood testing device, according to the SEC.
Additionally, the Commission alleged that Decision Diagnostics’ advisors warned that the Covid-19 blood testing device will not work as the firm described it.
The SEC alleged that the defendants’ false and misleading statements regarding their supposed breakthrough technology to detect the deadly virus led to surges in the price and trading volume of Decision Diagnostics’ stock.
SEC is committed to pursuing companies attempting to exploit the COVID-19 pandemic to harm investors
In a statement, SEC Division of Enforcement Director Stephanie Avakian said, “During this unprecedented time, when the need for truthful disclosures concerning Covid-19 tests is of vital importance, Decision Diagnostics and its CEO allegedly misled investors by claiming to have made a working test device when all they had was an idea that had not materialized into a product. With the onset of the global pandemic, we quickly pivoted to identify potential areas of fraud. This case is another example of how the Commission will hold accountable those who exploit the pandemic to harm investors.”
“In our complaint, we allege that Decision Diagnostics and Berman repeatedly made baseless representations to the investing public about market-moving events like progress in obtaining FDA approval and having breakthrough technology,” said Anita B. Bandy, Associate Director of the Division of Enforcement.
The SEC filed the complaint against the defendants in the U.S. District Court for the Southern District of New York. Decision Diagnostics and Berman were accused of violating antifraud provisions of the securities laws.
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