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COVID-19 PUMP AND DUMP

On June 9, 2020, the SEC filed a Complaint alleging that Jason C. Nielsen operated a “pump and dump” scheme, thereby defrauding other investors. Nielsen knowingly posted false statements on investment forums in regard to the stock of a biotechnology company, Arrayit Corporation. A “pump and dump” scheme is when an investor buys stock in a given company and subsequently lies about the company’s affairs in order to “pump” up the value of his investment, and then proceeds to “dump” his shares after their value has gone up. Nielsen allegedly made approximately $137,000 from this scheme.

Nielsen, through his posts on investment forums, proclaimed that Arrayit had developed a COVID-19 blood test and that the test had gotten emergency approval from the FDA. Neither was true. Nielsen owned about 10% of Arrayit’s common stock. His false and/or misleading claims defrauded investors. On top of this, Nielsen also allegedly utilized a tactic known as “spoofing,” where an investor places orders for large amounts of a company’s stock and then cancels them, creating the appearance of an increase in demand.

The SEC charged Nielsen with violating the antifraud provisions of the federal securities laws, and seeks permanent injunctions, civil money penalties, a penny stock bar, and disgorgement with prejudgment interest.

If you wish to discuss any securities related question, please contact David A. Weintraub, P.A., 7805 SW 6th Court, Plantation, FL  33324.  By phone: 954.693.7577 or 800.718.1422.

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