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SEC halts trading in two stocks amid claims about COVID-19 tests

Shares of two corporations {that a} quick vendor alleged have been making fraudulent claims about checks for COVID-19 have been suspended from buying and selling by the Securities and Exchange Commission on Wednesday, because the regulator moves to crack down on illegal activity throughout the pandemic.

Trading of Predictive Technology Group Inc. shares
was halted at 9:30 a.m. Eastern time “because of questions regarding the accuracy and adequacy of information in the marketplace concerning the company,” the SEC said in a statement.

Those questions relate to statements the corporate made “about being able to immediately distribute large quantities of serology tests to detect the presence of COVID19 antibodies,” in press releases issued on March 25, March 30 and April 8, stated the SEC assertion.

Shares of SCWorx Corp.
in the meantime, have been suspended, additionally at 9:30 a.m., “because of questions and concerns regarding the adequacy and accuracy of publicly available information in the marketplace concerning SCWorx,” the SEC said.

These included press releases and different publicly disseminated statements, since at least April 13, about SCWorx’s settlement to promote COVID-19 checks, in addition to a Form 8-K filed on April 16, concerning the sale of COVID-19 checks.

“We commend the SEC for taking swift action against these questionable actors,” Nathan Anderson, a accomplice at quick vendor Hindenburg Research and creator of a number of reviews on the businesses, instructed MarketWatch. “We find it reprehensible that some companies seem to be taking advantage of the global pandemic by making suspect claims.”

Predictive Technology’s inventory was halted at 82 cents, having gained 12% for the reason that begin of the yr, outperforming the foremost benchmarks. SCWorx was halted at $5.76, after gaining 100.5% within the yr thus far. (The S&P 500
is down 13.2% in 2020.) Many small biotech corporations have seen their shares soar on hopes they’ll have the ability to money in on the necessity for testing and coverings for the pandemic, which has contaminated 2.61 million individuals worldwide and brought about 182,004 fatalities, according to data aggregated by Johns Hopkins University.

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In a report published on April 17, Hindenburg questioned the information from SCWorx, a nanocap headquartered in a Regus rental workplace in New York City, of a $35 million–a–week deal to purchase and resell COVID-19 checks, main to an enormous 434% surge in its inventory worth that lifted it out of penny-stock territory.

Among the problems the report highlighted:

• SCWorx stated it had a “committed purchase order” from digital well being firm Rethink My Healthcare for two million speedy testing items with a provision for extra weekly orders of two million items for 23 weeks, in accordance with a press launch. But Rethink My Health is a startup based by a 25-year-old in August 2018 with solely three workers and three consultants/advisors listed on its workforce web page

• SCWorx’ chief govt has “a checkered past,” in accordance with Hindenburg, and pleaded guilty to felony tax-evasion charges, in a case stemming from 2015.

• The provider SCWorx is working with, an Australian company called Promedical, has a CEO, Neran De Silva, who’s alleged to have falsified his medical credentials, with a former firm having been accused of defrauding its customers and investors, in accordance with Hindenburg and Australian media reviews.

• Promedical instructed the U.S. Food and Drug Administration that it was working with Chinese producer Wondfo in promoting its COVID-19 check kits, however Wondfo said that was false and denied any relationship. Promedical’s title was then faraway from FDA test-provider lists within the U.S. and Australia.

An SCWorx spokesperson declined to remark past directing MarketWatch to the corporate’s personal press releases and SEC filings.

In a separate report published March 27, Hindenburg questioned Predictive Technology’s COVID-19 check announcement. The points it raised embody:

• Predictive is a small firm primarily based in Salt Lake City that provides stem-cell merchandise to clinics throughout the U.S. In March, it stated it was partnering with a Chinese producer known as Jiangsu Dablood Pharmaceutical Co. Ltd. to make and distribute speedy COVID-19 checks that might produce ends in simply 15 minutes. But Dablood, as that firm is understood, shouldn’t be an accredited producer of checks for the virus, and media in China have reported that it has been promoting them with out medical or manufacturing licenses.

• Predictive’s chief govt, Brad Robinson, has been sued for making claims about a previous medical product’s efficacy and for falsely claiming it could be pitched by the TV personality Dr. Oz and the Gates Foundation, amongst others.

“We see 100% near-term downside in shares of Predictive and expect that Predictive must continue to dilute equity through near-term stock sales in order to survive,” Anderson wrote within the report.

Predictive didn’t instantly reply to a request for remark, nevertheless it did publish a response on its website from the Dablood board in response to the Hindenburg report.

That remark stated the corporate is a unit of a unit of China’s Da’an gene, which is growing in vitro diagnostic reagents and testing gear and is licensed in China. That firm shouldn’t be included in an FDA list of tests which have obtained Emergency Use Authorization for checks.

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