DOJ and SEC Pursue Decision Diagnostics CEO on COVID-19 Testing Fraud
Posted on 12/19/2020
The U.S. Justice Department revealed that a federal grand jury has indicted a California chief executive for allegedly concocting a scheme to defraud investors with false claims about a COVID-19 test. The false claim led to investor losses. Keith Berman, 67, the CEO of Decision Diagnostics Inc., was charged with one count of securities fraud and one count of making false statements, the DOJ said. The SEC temporarily suspended trading in Decision Diagnostics’ securities on April 23, 2020. The complaint, filed in the U.S. District Court for the Southern District of New York, charges Decision Diagnostics and Berman with violating antifraud provisions of the securities laws
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According to the SEC press release, “The SEC’s complaint alleges that Decision Diagnostics and Berman seized upon the global pandemic through a series of press releases that falsely claimed Decision Diagnostics had developed a finger prick blood test that could detect Covid-19 in less than a minute. According to the complaint, from March 2020 to at least June 2020, Decision Diagnostics and Berman made false and misleading statements about the existence of Decision Diagnostics’ Covid-19 device and progress towards FDA emergency use authorization. As alleged, at the time of these claims, Decision Diagnostics lacked a proven method for detecting the virus and had no physical testing device. Further, its advisors had warned that the testing kit they were trying to manufacture would not work as Decision Diagnostics had described. The complaint also alleges that the statements created the misleading impression that the test was soon to be introduced to the market and led to surges in the price and trading volume of Decision Diagnostics’ stock.”