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Banks

U.S. SEC charges two companies, CEO over misleading COVID-19 claims

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission said on Thursday it has charged two companies and a chief executive officer with making misleading claims related to COVID-19, the disease caused by the novel coronavirus.

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

The securities regulator, which had suspended trading of shares in both companies, has charged Turbo Global Partners Inc. and its CEO Robert W. Singerman with making false and misleading claims related to equipment to detect individuals with fevers, according to an SEC statement. Previously, Singerman had been charged with fraud.

Separately, the SEC has filed charges against Applied BioSciences Corp, which said it had begun offering and shipping finger-prick COVID-19 tests to the general public, when in fact the tests could only be administered in consultation with a medical professional, the statement said.

Counsel for the companies and Singerman did not respond immediately to calls for comment.

In charges filed against Turbo Global in the Middle District of Florida, the SEC alleged the penny stock company had claimed in press releases to have a “multi-national public-private-partnership” to sell thermal scanning equipment involving another company. There was no such agreement and the equipment was not immediately available as the company had claimed, the SEC said.

The SEC said that Turbo Global’s chief Singerman had been enjoined from violating federal securities laws after the agency charged him with fraud in 1999 based on “fraudulent sale of securities through a network of boiler rooms.”

In the case of Applied BioSciences, the SEC said the company had violated antifraud provisions of federal securities laws, seeking injunctive relief and civil penalties.

The firm shifted its focus from cannabinoid-based products to pandemic products in March to “exploit the COVID-19 pandemic for profit”, the SEC said in charges filed against the microcap company in the Southern District of New York.

Applied BioSciences said in a March 31 press release that it had begun shipping home use of a COVID-19 test for “anyone wanting immediate and private results” when they were never intended for home use, the charges said.

Applied BioSciences also had not shipped any tests by that date and it failed to disclose the tests were not authorized by the U.S. Food and Drug Administration, according to the SEC’s allegations.

Reporting by Chris Prentice; Editing by Chizu Nomiyama

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