SEC Charges Company for Misleading Covid-19 Claims
Litigation Release No. 24819 / May 14, 2020
Securities and Exchange Commission v. Applied BioSciences Corp., No. 20-cv-03729 (S.D.N.Y. filed May 14, 2020)
The Securities and Exchange Commission today charged Applied BioSciences Corp. with fraud based on the company's claims in a press release that it was offering and shipping products to combat the COVID-19 virus. The SEC previously suspended trading temporarily in the securities of Applied BioSciences.
According to the SEC's complaint, filed in federal court in the Southern District of New York, Applied BioSciences issued a press release on March 31 stating that it had begun offering and shipping supposed finger-prick COVID-19 tests to the general public that could be used for "Homes, Schools, Hospitals, Law Enforcement, Military, Public Servants or anyone wanting immediate and private results." The complaint alleges that contrary to these claims, the tests were not intended for home use by the general public and could be administered only in consultation with a medical professional. The complaint further alleges that Applied BioSciences had not shipped any COVID-19 tests as of March 31, and its press release failed to disclose that the tests were not authorized by the U.S. Food and Drug Administration.
The SEC's complaint charges the company with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief and civil penalties.
The SEC's investigation has been conducted by Kristine Zaleskas, Dugan Bliss, and Thomas P. Smith, Jr., and supervised by Lara S. Mehraban, all of the New York Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
The SEC's Office of Investor Education and Advocacy previously issued an investor alert cautioning investors to be aware of COVID-19 scams.