SEC sues California biotech company for misleading investors about COVID-19 tests

FILE PHOTO: The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission sued Decision Diagnostics Corp and its chief executive for allegedly misleading investors by promising the biotechnology company could test for COVID-19 with a finger-prick of blood and provide accurate results in less than one minute.

In a complaint filed on Thursday in Manhattan federal court, the SEC said Chief Executive Keith Berman made materially false statements between March and June about what he claimed was his company’s blood testing kit, and its efforts to obtain Food and Drug Administration approval for its emergency use.

The SEC said all the California-based company had at the time was “a theoretical concept that had not yet materialized into a product,” and that Berman’s misstatements led to surges in Decision Diagnostics’ stock price and trading volume.

Decision Diagnostics did not immediately respond to requests for comment.

Reporting by Jonathan Stempel in New York; Editing by Will Dunham