BROOKLYN, N.Y. (CN) - The Securities and Exchange Commission filed suit Friday against a Florida company that claims to make painkillers with cobra venom.
Filed in Brooklyn, the SEC complaint takes aim at microcap issuer Nutra Pharma Corp. and its CEO, Rik Deitsch, saying they released six press releases that materially misled investors.
In addition to misrepresenting that it was distributing its product internationally – it was not – Nutra Pharma purported to have upgraded its cobra farm facilities, according to the complaint.
In fact “Nutra Pharma had no cobras, had no cobra farm, and had never produced cobra venom,” the SEC says.
While making these claims, according to the complaint, Nutra Pharma and Deitsch distributed unregistered securities to retail investors.
Deitsch meanwhile allegedly “engaged in manipulative trading designed to ‘walk up’ Nutra Pharma's stock price and create the appearance of active trading in Nutra Pharma.”
One consultant for Nutra Pharma also made numerous misstatements while soliciting investors in Nutra Pharma, the SEC says, accusing this man of acting “as an unregistered broker, despite being permanently barred in 2001 by the NASD (now FINRA) from associating with NASD member firms.”
Deitsch and Nutra Pharma is charged with violations of the antifraud, registration, and reporting provisions of the Securities Act of 1933, as well as the Securities Exchange Act of 1934.
The SEC seeks a permanent injunction, disgorgement, and civil penalties.
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