The Securities and Exchange Commission (SEC) filed separate complaints against Applied BioSciences and Turbo Global Partners for allegedly making misleading statements about its initiatives to prevent the spread of COVID-19.
The federal securities regulator also named Robert W. Singerman, the CEO of Turbo Global, as a defendant in its lawsuit against the company.
Allegations against Applied BioSciences
Applied BioSciences is a microcap company focused on the development and commercialization of novel, science-driven, synthetic cannabinoid therapeutics/biopharmaceuticals.
In the complaint, the SEC alleged that the company tried to “exploit the COVID-19 pandemic for profit” by dramatically shifting its focus to manufacturing pandemic-related products.
According to the federal securities regulator, on March 31, Applied BioSciences issued a press release claiming that is was offering and shipping COVID-19 home test kits to the general public to prevent the spread of the virus. The company also touted that it is easy to use its home test kits because it only requires a finger prick and people will get results in less than 15 minutes.
The SEC alleged that the press release of Applied BioSciences was false because it “did not offer or intend to sell the test kit for home or private use by the general public, and it had not begun shipping any test kits.” The federal securities regulator also noted that the company “intended to screen potential purchasers only to allow purchases in connection with use by nursing homes, schools, military, and first responders…”
Additionally, the SEC alleged that the company’s press release was “materially misleading” citing the fact that the company did not disclose that the Food and Drug Administration (FDA) hasn’t approved or authorized the sale of any COVID-19 at-home test kits.
The federal securities regulator filed its complaint against Applied BioSciences in the federal court of the Southern District of New York.
Allegations against Turbo Global
Turbo Global Partners is a penny stock company. It is operating as an investment management company and also doing business as Turbo Digital focusing on providing Indoor Display Syndicated Advertising services.
The SEC filed its lawsuit Turbo Global and Singerman in the federal court of the Middle District of Florida.
In the lawsuit, the federal securities regulator alleged that the penny stock company’s press released on March 30 and April 3 were “false” and “misleading.
On March 30, Turbo Global announced its purported “multi-national public-private-partnership” to sell thermal scanning equipment to detect individuals with fevers. The penny stock company also claimed that the scanning technology could help break “the chain of virus transmission through early identification of elevated fever, one of the key early signs of COVID-19.”
On April 3, Singerman claimed that Turbo Global the Governors and Chiefs of Staff for all 50 states regarding the availability of the thermal scanning equipment. He also claimed they provided the states with “technical documents for our technology.” Additionally, he stated that he personally contacted the CEOs of major retailers including Costco, Walmart, and Target, and told them, “We are standing by to assist with expedited procurement” of the thermal scanning equipment.
According to the SEC, Turbo Global “did not have the technology described as “our” technology because it did not enter into an agreement with the owner of the thermal scanning technology.
The federal securities regulator also noted that the penny stock company’s contact with the Governors and their Chiefs of Staff were “unsolicited emails or faxes with false information.”
Applied BioSciences, Turbo Global violated federal securities laws
The SEC alleged that Applied BioSciences and Turbo Global and its CEO’s false and misleading statements in their press releases violated the antifraud provisions of the federal securities laws. It is seeking a court order imposing permanent injunctive relief and civil penalties against the defendants.
In a statement, SEC Division of Enforcement Director Co-Director Stephanie Avakian said, “We are actively monitoring the markets to detect potential fraudsters who seek to use the COVID-19 crisis as a basis for investment scams. As alleged in these complaints, Applied BioSciences and Turbo Global sought to take advantage of the COVID-19 crisis by misleading investors about their ability to provide solutions.