SAN ANTONIO (CN) – A woman who claims she invested in a biotech-stock scam can recoup nearly $1.2 million in lost profits, a federal judge ruled.
Eleanor Rabin acquired $80,000 by selling her condo and spent the funds on shares of Immunosyn, according to her federal complaint. Rabin said a boyfriend who was involved in selling the stock told her about the investment opportunity before he died.
Immunosyn advertised that it had the right to sell SF-1019, a drug purportedly owned by Argyll Biotechnologies, the complaint states.
She said she was interested because of her own struggle with a neurological disorder called Charcot-Marie-Toothe disease. After reaching out to her boyfriend’s recruiter, Douglas McClain Sr., Rabin allegedly asked whether using SF-1019 could help her.
In the course of their phone conversation, Rabin says McClain promised to send her vials of the drug. Rabin also allegedly asked about investing in Immunosyn, so that she could purchase a home in the future.
McClain told Rabin that an $80,000 investment would buy 80,000 shares before the stock went public on NASDAQ at $15 a share, making her a millionaire, according to the complaint.
But once she sent the money, Rabin says it took a year for her stock certificates to arrive from Padmore Holdings, an entity owned by McClain, Douglas McClain Jr. and James Miceli.
Immunosyn had already gone public when the certificates arrived, and the stock plummeted, according to the complaint. Rabin says she sold her shares for a mere $0.12 each.
Rabin claims there was no Immunosyn listing on NASDAQ, nor had the FDA approved SF-1019.
Rabin sued McClain; Douglas McClain, Jr.; Miceli; Padmore Holdings; Argyll Biotechnologies; Argyll Equities; SW Argyll Investments; and Argyll Aviation. Her claims include Securities Exchange Act violations, RICO Act violations and fraud.
None of the defendants responded to the third amended complaint, so U.S. District Judge Xavier Rodriguez granted Rabin default judgment on Wednesday.
Rodriguez ordered the defendants to pay $1.185 million after taking into consideration the $15,000 Rabin made by selling the stock.