Cancer drug company accuses U.S. market makers of stock usurpation

Cancer drug company accuses U.S. market makers of stock usurpation

A cancer-focused biotech company has sued eight of America’s biggest traders, including Citadel Securities, Susquehanna and Virtu, alleging they deliberately depressed its stock price by placing sell orders they didn’t have not intend to perform.

The lawsuit, filed Thursday by Northwest Biotherapeutics in federal court in New York, alleged that marketers “deliberately engaged in repeated impersonations that interfered with the natural forces of supply and demand” by spending tens of millions of false orders between December 2017 and August this year.

The trading companies would then cancel those orders and buy the shares of Northwest at an artificially lower price, according to the complaint.

Lawyers for the clinical-stage biotech company say a “particularly egregious example” of this activity took place in May, after the release of what they claim was positive trial data for the cancer drug. DCVax-L brain cancer from Northwest. The design of the study had been questioned by scientists.

The news “should have lifted NWBO’s stock price, absent market manipulation,” they wrote, referring to the company’s ticker symbol. Instead, it fell from $1.73 to a low of $0.3862.

“This staggering 78% drop in price in one day with overwhelmingly positive news about the company was caused by defendants’ relentless and brazen manipulation of the NWBO stock market,” added attorneys for Cohen Milstein Sellers & Toll.

However, the presentation of the DCVax clinical data was not well received by all commentators. “Overall, patients treated with DCVax had a 10% higher risk of tumor progression than placebo – a result that is the antithesis of what is required of any effective cancer treatment,” the company wrote. the industry trade publication STAT.

In March, the company warned in regulatory submissions that “due to recurring operating losses and operating cash shortfalls, there is substantial doubt about the company’s ability to continue operations within one year from the date of such filing”.

Northwest Biotherapeutics, based in Maryland, has a market capitalization of approximately $860 million and is listed on the US over-the-counter market. Its shares are currently changing hands at around $0.83.

In 2019, the company settled a Securities and Exchange Commission action after the regulator found it failed to maintain internal controls over its financial reporting for 12 years.

In addition to Citadel Securities, Susquehanna and Virtu, the lawsuit named Canaccord Genuity, GTS, Instinet, Lime Trading and Susquehanna’s G1 subsidiary as defendants.

Citadel Securities, the group founded by Ken Griffin, opposed Northwest’s allegations.

‚ÄúThis frivolous lawsuit appears to be nothing more than an attempt by Northwest Biotherapeutics to distract from its long history of governance and management failures, charges brought by the SEC for financial reporting failures. and lawsuits from its own shareholders,” Citadel Securities said in a statement. .

“We intend to pursue any legal action against Northwest Biotherapeutics for making these false and baseless allegations, which only undermine the integrity of our capital markets,” the trading company added.

Nomura, owner of Instinet, declined to comment, while the other trading companies did not immediately respond to requests for comment.

In its complaint, Northwest said it sold 49 million of its shares at artificially deflated prices. He added that there was “an extremely low statistical probability” that the price changes in each of the alleged spoofing incidents occurred due to normal market movements.

“It’s bad enough to engage in market manipulation, but to do so at the expense of cancer patients, some of whom have no other treatments to pin their hopes on, is unconscionable,” Laura Posner said. , partner at Cohen Milstein.

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