PixarBio CEO Frank Reynolds, & M. Jay Herod & Kenneth Stromsland Committed Alleged Securities Fraud Connected to Manipulated Trading
The CEO of Boston-based biotech firm PixarBio Corp, Frank Reynolds, 55, and two associates, M. Jay Herod, 51, and Kenneth Stromsland, 45, were reportedly recently arrested and charged with alleged securities fraud related to a purported scheme to manipulate trading in the company’s shares, according to a Complaint from the U.S. Attorney’s Office, District of Massachusetts, under review by attorney Alan Rosca.
Attorney Alan Rosca, of the RoscaLaw LLC firm, would like to talk to investors and is investigating activity related to PixarBio’s alleged securities fraud. Investors who believe they may have lost money in activity related to activity related to PixarBio’s alleged securities fraud are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
PixarBio CEO Reynolds, and two of his associates, Herod and Stromsland, specifically, beginning in approximately August 2013, allegedly engaged in a scheme to defraud PixarBio investors by allegedly making false and misleading statements, and by engaging in purported manipulative trading of its shares, the Complaint notes.
Said Alleged misstatements related to its prospects, its financing, and the background and track record of Reynolds, the Complaint notes.
Reynolds, for example, allegedly promised investors “a HUGE return on investment (ROI) for any investors in PixarBio’s NeuroRelease” via a December 2015 email and memorandum to potential investors, the Complaint states.
Reynolds also made the following statement to investors:
The value of our portfolio on Wall Street is soaring with excitement around our sales partnership. At only $1,000,000,000 right now, as we prepare to replace morphine in the clinic in late 2017 or early 2018, and we expect our valuation to long-term trend UP.
In reality, U.S. Department of Justice alleges, PixarBio purportedly did not have a market value of one billion dollars, or a product to end “thousands of years of morphine and opiate addiction”, the Complaint states.
PixarBio’s Prospective Drug, Carbamazepine, was Allegedly Not a Treatment for Opiate Addiction, but an Existing Drug for PixarBio
Rather than being an a treatment for opiate addiction, the prospective drug, carbamazepine, is allegedly not a treatment for opiate addiction, but an existing drug for which PixarBio purported to have developed an additional means of delivery, via injection, in a time-release form, according to the aforementioned Complaint under review by attorney Alan Rosca.
Stromsland and Herod also allegedly engaged in manipulative trades in PixarBio stock that simulated market interest in the stock and artificially pushed up the trading price, the Complaint states, and these trades included overlapping orders to buy and sell PixarBio stock at the same price per share, a purported manipulative technique known as “matched trading”).
The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $5 million, the Complaint states.
Securities Lawyer Investigating
The RoscaLaw firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating PixarBio’s alleged securities fraud. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions, and has helped recover tens of millions of dollars on behalf of investors.
Investors who believe they lost money as a result of PixarBio’s alleged securities fraud may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@roscalaw.com, or through the contact form on this webpage.