The Securities and Exchange Commission has charged two companies it says claimed to offer products to combat the COVID-19 virus.
One complaint is against against Applied BioSciences Corp. and the other is against Turbo Global Partners, Inc. and its chief executive officer, Robert W. Singerman.
The SEC had previously suspended trading temporarily in the securities of the two firms.
The SEC’s complaint against Applied BioSciences charges the company with violating antifraud provisions of the federal securities laws and seeks permanent injunctive relief and civil penalties. The SEC’s complaint against Turbo Global and Singerman includes similar charges plus an officer and director bar against Singerman.
According to the SEC’s complaint against Applied BioSciences, filed in federal court in the Southern District of New York, the company issued a press release on March 31 stating that it had begun offering supposed finger-prick COVID-19 tests to the general public that could be used for “Homes, Schools, Hospitals, Law Enforcement, Military, Public Servants or anyone wanting immediate and private results.” The SEC complaint alleges that contrary to these claims, the tests were not intended for home use by the general public and could be administered only in consultation with a medical professional. The complaint further alleges that Applied BioSciences had not shipped any COVID-19 tests as of March 31, and its press release failed to disclose that the tests were not authorized by the U.S. Food and Drug Administration.
Applied BioSciences announced on April 24 that that it terminated its agreement with its supplier for COVID-19 test kits and that the company has not distributed, and will not be distributing, the test kit. On April 1, immediately after the supplier of the test kit notified the company that the FDA had not approved the kit for home use, the company revised its websites to remove reference to home use and on April 1 it removed the test kit from its online store.
The SEC’s complaint against Turbo Global and Singerman, filed in federal court in the Middle District of Florida, alleges that the company issued false and misleading press releases on March 30 and April 3 regarding a purported “multi-national public-private-partnership” to sell thermal scanning equipment to detect individuals with fevers.
According to the complaint, Turbo Global claimed that this technology could be instrumental in “breaking the chain of virus transmission through early identification of elevated fever, one of the key early signs of COVID-19.” As alleged, the press releases also included statements, attributed to the CEO of Turbo Global’s supposed corporate partner in the partnership, that the technology “is 99.99% accurate” and was “designed to be deployed IMMEDIATELY in each State.”
In fact, the SEC alleges, Turbo Global had no agreement to sell the product, there was no partnership involving any government entities, and the CEO of Turbo Global’s supposed corporate partner did not make or authorize the statements attributed to him. According to the SEC, Singerman drafted the releases, which he knew to be false.
The SEC charged Singerman with fraud in 1999 based on his fraudulent sale of securities through a network of boiler rooms, and obtained a permanent injunction against him.
A message left for Singerman at Turbo Global was not returned by press time.
“We are actively monitoring the markets to detect potential fraudsters who seek to use the COVID-19 crisis as a basis for investment scams,” said Stephanie Avakian, co-director of the SEC’s Division of Enforcement. “As alleged in these complaints, Applied BioSciences and Turbo Global sought to take advantage of the COVID-19 crisis by misleading investors about their ability to provide solutions.”
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