Multiple Brokers, Traders, and Companies have Been Charged with Investment Fraud Related to COVID-19
As if individual investors who are feeling the financial effects of the COVID-19 pandemic didn’t have enough to worry about already, the U.S. Securities and Exchange Commission (SEC) has recently initiated enforcement actions against multiple brokers, traders, and companies for alleged fraud related to the novel coronavirus crisis. Even for investors who have not been personally affected by the alleged fraudulent activities, these enforcement actions should serve as a stark warning of the need to be vigilant in protecting their investment portfolios, and the importance of engaging a securities fraud attorney promptly at the first sign that something could be wrong.
SEC Issues Multiple Press Releases Highlighting Enforcement Actions Targeting COVID-19 Investment Fraud
Since late April 2020, the SEC has issued multiple press releases highlighting its efforts to combat investment fraud related to the COVID-19 crisis. Here are three examples of the cases that the SEC is currently pursuing:
1. SEC Charges Company and CEO for N95 Mask Investment Scam
On April 28, 2020, the SEC announced charges against Praxsyn Corp. and its CEO based on allegations that the company falsely claimed it was able to supply large quantities of N95 protective masks. According to the SEC, the defendants, “sought to exploit unsuspecting investors by issuing false and misleading press releases concerning Praxsyn’s ability to source and supply N95 masks for the COVID-19 virus.” The SEC is further alleging that while the company stated that it was accepting orders “of a minimum of 100,000 masks,” it never ordered or obtained any masks which it could supply to its purported customers.
2. SEC Charges Companies and CEO for Misleading COVID-19 Claims
On May 14, 2020, the SEC announced charges in two separate cases against Applied BioSciences Corp. (“Applied BioSciences”), Turbo Global Partners, Inc. (“Turbo”) and Turbo’s CEO. The case against Applied BioSciences alleges that the company issued false press releases stating that it was offering and shipping finger-prick COVID-19 tests for home use, while Turbo and its CEO are accused of falsely claiming that the company was entering into a “multi-national public-private-partnership” to sell thermal scanning thermometers. Both companies and Turbo’s CEO are facing charges for federal securities fraud, and the SEC has suspended trading of both companies’ stock.
3. SEC Charges Trader Engaged in Alleged Manipulative Trading Scheme Involving COVID-19 Claims
On June 9, 2020, the SEC announced charges against a trader in California who is accused of attempting to execute a fraudulent pump-and-dump scheme by making false representations about a company’s “approved” COVID-19 blood test in online investment forums. According to the SEC, the trader made multiple online posts repeating the false claims, and also placed and then cancelled several large orders to make it appear as though the stock was in high demand. The defendant reportedly reaped $137,000 in profit from unsuspecting investors before the SEC suspended trading in the company.
Have You Lost Money in a COVID-19 Investment Fraud Scam?
If you believe that you may have lost money in a COVID-19 investment fraud scam, it is important that you discuss your situation with an attorney promptly. To schedule a free consultation with a securities fraud attorney at Zamansky LLC, call us at 212-742-1414 or request an appointment online today.