In December, the SEC filed a complaint against Decision Diagnostics and its CEO, Keith Berman, for falsely claiming the company had developed a finger prick blood test that could instantaneously detect COVID-19.  As stated in its complaint, the SEC temporarily suspended trading of Decision Diagnostics’ securities on April 23, 2020.

Now, investors have brought suit as well.  Three institutional investors claim the company – which was already in financial distress as a result of alleged misappropriations by Berman – falsely disclosed it was developing an at-home COVID-19 test nearing regulatory authorization and then denied investors their right to convert their shares, which were worth millions at the time.  The complaint alleges Berman also falsely announced a distribution partnership with a company owned by members of the plaintiff companies.  Once the alleged fraud became known to the market, the company’s stock took a nosedive.  Through their lawsuit, the investor companies seek, among other things, to restrain defendants’ assets pending the appointment of a receiver, a complete accounting, and restitution to the investors.

Check back here for updates on this case, as well as others on securities claims relating to companies’ COVID-19 disclosures.

Photo of Erica T. Jones Erica T. Jones

Erica Jones is a litigation associate with a particular focus on emerging legal issues relating to cryptocurrency and changing technologies, and securities litigation. Most recently, Erica has represented a publicly traded company and their affiliates in two putative class action RICO cases, where…

Erica Jones is a litigation associate with a particular focus on emerging legal issues relating to cryptocurrency and changing technologies, and securities litigation. Most recently, Erica has represented a publicly traded company and their affiliates in two putative class action RICO cases, where she drafted motions and arguments to oppose class certification.

Erica earned her J.D. from Harvard Law School, where she received the Dean’s Scholar Prize in “Legal Profession – The New Market for Personal Legal Services: Ethical and Professional Challenges.”  She also served as a chairperson of the Women’s Law Association and as a line editor of the Harvard Journal of Law and Gender.

Prior to joining Proskauer, Erica was an intern with the Civil Division of the Department of Justice in the Constitutional and Specialized Tort Litigation Section. Erica earned a B.A. in English Literature and Media Studies from Auburn University, where she was a Presidential Merit Scholar.