The U.S. Securities and Exchange Commission has actually been cracking down on companies that make dubious claims about how they can help battle the coronavirus pandemic. Now, one innovation business states the regulator went too far.
Nano Magic Inc.,
a maker of lens care, anti-fog and electronic gadget defense items, has actually installed an unique obstacle to an SEC choice on April 30 to momentarily freeze its stock over online claims that a disinfectant the business held a patent for could “eliminate” the unique coronavirus.
The claims, published on.
The Bloomfield Hills, Mich.-based business states it wasn’t even aware of the online activity until it was called by the SEC a week before the suspension order.
While the trading suspension ended on May 14, reputational damage from the SEC’s action has jeopardized potential relationships with customers and merchants that Nano Magic hoped would sell its items, the company said in a May 7 petition to the firm to end the suspension.
In a reaction to Nano Magic, the SEC said the company was asking it to disregard what seemed a collaborated campaign to manipulate Nano Magic’s share rate. The company’s claim that it was uninformed of the source of the message board posts was unimportant, the regulator stated.
The SEC has actually likewise accused Nano Magic’s executives of making matters worse by releasing a press release on April 7 with a declaration from its president stating the business was “excited to join the Covid-19 fight.”
The declaration by CEO Tom Berman was true and didn’t justify a trading suspension, Nano Magic competes.
The dispute over the stock-freeze has actually escalated into an unforeseen obstacle to the SEC’s power to suspend trading in a public company if it believes market manipulation is afoot. SEC officials have actually spotlighted their emergency suspensions as an important tool in the fight against coronavirus-related fraud.
The agency has issued more than 30 suspensions in an effort to secure financiers from incorrect and deceptive claims about products or services that might help customers weather the pandemic, SEC enforcement co-director Steven Peikin said in a speech last month.
Nano Magic has actually likened its suspension to a business death sentence and has accused the SEC of issuing its freeze without first obtaining all the facts. In its case, using such a drastic treatment was an error, Nano Magic has actually argued in its filings with the company.
Nano Magic is noted on OTC Link, an exchange viewed as an alternative trading platform for businesses that don’t fulfill the minimum listing requirements of bigger nationwide exchanges such as the Nasdaq or the New York Stock Exchange.
Nano Magic’s stock has yet to resume trading despite the expiration of the suspension order, and the company has asked the SEC’s commissioners to leave the order and take steps to mitigate the damage it claims was done to its organisation.
” We are positive that we have actually put a very engaging record in front of the SEC and are hopeful for a quick and beneficial resolution,” Nano Magic’s legal representative, Jacob Frenkel of Dickinson Wright PLLC, said.
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