Securities Lawyers Blog
The law offices of Gana Weinstein LLP are investigating investor losses in Star Scientific, Inc. / Rock Creek Pharmaceuticals (Star Scientific) on the heels of a Financial Industry Regulatory Authority (FINRA) investigation into alleged false and misleading research reports issued by Oits Bradley (Bradley) presumably made about the company. Although FINRA only refers to Star Scientific in its complaint against Bradley as the “Pharmaceutical Company” we believe that the referenced report citations refer to Star Scientific.
According to FINRA, Bradley was an equity research analyst with Gilford Securities, Inc. (Gilford), who authored eight research reports containing false, misleading and unwarranted statements concerning Star Scientific. During the relevant time period Bradley was associated with Gilford from February 2012 until his termination from the firm in October 2014. FINRA alleged that Bradley’s research reports on the Star Scientific were distributed to Gilford’s brokers as well as various financial media outlets, investment research firms, firm clients and others.
FINRA found that Bradley falsely claimed that a prominent medical research university was conducting clinical trials on humans to study the effects of one of the Star Scientific’s dietary supplements on thyroid disorders. Additionally, FINRA alleged that Bradley made unwarranted and misleading statements concerning Star Scientific’s financial prospects based on his inaccurate claim that the university was conducting clinical trials on humans, and made false, misleading and unwarranted claims regarding the company’s announcement of preliminary results of its clinical trials on humans.
FINRA cited reports issued by Bradley promoting Star Scientific as “the real deal. Not petri dishes. Not mice. Human beings. Lots of them. Fully enrolled, and to be complete in December. Only two months away, but sufficiently underway that we can now at least speculate success. And, potentially, a Blockbuster.” In another report Bradley stated that his estimate that sales to treat thyroid conditions could produce “a potential $400 million revenue and $1.00 per fully taxed, fully diluted per share potential…”
However, these projections and reports turned out to be false and Star Scientific’s stock has collapsed while its CEO resigned amid allegations of scandal. Adjusting for a 25 to 1 stock split shares of Star Scientific have dropped from a high of over $120 a share in July 2012 to only $1.37 in July 2015. In addition, according to news sources, CEO and founder Jonnie R. Williams Sr. and president Paul Perito stepped down from their positions in December 2013, concerning a political scandal involving Virginia Gov. Bob McDonnell.
Investors who have suffered losses in Star Scientific may be able recover their losses through securities arbitration. Research analysts have an obligation to provide truthful and complete information to investors in their reports. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases where brokerage firms fail to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.