SEC Sues Pharmaceutical Company for Accounting and Disclosure Fraud and Bars Its Former Chief Financial Officer

ADMINISTRATIVE PROCEEDING
File No. 3-22416

January 14, 2025 - The Securities and Exchange Commission today announced settled charges against DMK Pharmaceuticals Corporation f/k/a Adamis Pharmaceuticals ("Adamis") and Robert O. Hopkins ("Hopkins"), its former Chief Financial Officer, for a fraudulent scheme to generate revenues using illegal prescriptions.

According to the SEC's Order, from 2016 through 2021, Adamis and Hopkins generated a material percentage of the company's revenues through illegal prescriptions written by a veterinarian who was compensated under a sham consulting agreement, and falsely recorded payments to the veterinarian as legitimate. The Order further states that Adamis's periodic reports, for which Hopkins was responsible, included improperly recognized revenue and had material misstatements.

The SEC's Order finds that Adamis and Hopkins violated the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 ("Securities Act"), that Adamis violated, and Hopkins caused the violation of, Section 17(a)(2) of the Securities Act, and that Adamis and Hopkins violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The SEC's Order also found that Adamis violated, and Hopkins caused the violations of, the reporting and books and records provisions under Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. Finally, the SEC's Order found that Hopkins violated Section 13(b)(5) of the Exchange Act and Rules 13a-14, 13b2-1, and 13b2-2 thereunder. Adamis consented to the issuance of a cease-and-desist order and agreed to an order of disgorgement and prejudgment interest totaling $334,314. Hopkins consented to the issuance of a cease-and-desist order, a bar from serving as an officer or director of a public company, and a denial of the privilege of appearing or practicing before the SEC as an accountant pursuant to Rule 102(e)(1)(iii) of the SEC's Rules of Practice.

The investigation was conducted by Stephen C. Bucci, senior accountant, and Janet Rich Weissman, senior counsel, and supervised by Ansu N. Banerjee, Assistant Regional Director, all in the SEC's Los Angeles Regional Office. Parallel investigations were conducted by the Federal Bureau of Investigation and the U.S. Attorney's Office for the Southern District of New York.