- A U.S. legal firm is alleging it has found evidence of a potential multi-year market manipulation scheme that caused substantial damages to Quantum BioPharma (CSE:QNTM) and its shareholders
- The lawsuit alleges that between Jan. 1, 2020, and Aug. 15, 2024, the defendants and/or their customers used “spoofing” techniques to manipulate the share price of Quantum BioPharma shares. The company is seeking damages of more than $US700 million
- “Spoofing” is a disruptive trading strategy where traders place numerous buy and sell orders, only to cancel them before any transactions are completed
- Shares of Quantum BIoPharma opened trading at C$10.63
A U.S. legal firm is alleging it has found evidence of a potential multi-year market manipulation scheme that caused substantial damages to Quantum BioPharma (CSE:QNTM) and its shareholders.
Houston, Texas-based Christian Attar Law Firm and Freedman Normand Friedland LLP, in conjunction with forensic investigators have been investigating a complaint filed by the biopharmaceutical company in the United States District Court for the Southern District of New York, alleging that CIBC World Markets, RBC Dominion Securities, engaged in market manipulation schemes that violated Section 10(b) and Rule 10b-5(a) and (c) and Section 9(a) of the Securities Exchange Act.
The lawsuit alleges that between Jan. 1, 2020, and Aug. 15, 2024, the defendants and/or their customers used “spoofing” techniques to manipulate the share price of Quantum BioPharma shares. The company is seeking damages of more than $US700 million.
“Spoofing” is a disruptive trading strategy where traders place numerous buy and sell orders, only to cancel them before any transactions are completed.
The law firms have agreed to handle and file this case on a contingency basis, hoping that the company will not face significant financial pressure from legal costs. These firms, in collaboration with industry experts, conducted a thorough investigation into the defendants’ actions and found sufficient evidence of market manipulation to justify pursuing claims. The complaint outlines this evidence, alleging that the defendants engaged in “spoofing” the market hundreds of times, repeatedly driving down the company’s stock price and causing harm to the company and its numerous retail investors.
In January 2020, the company’s stock was trading at more than C$636 per share (adjusted for post-splits or current terms), with a market capitalization nearing C$1.4 billion at the time. As of the market close on Friday, the share price had fallen to C$10.45 per share, with a market cap of C$20 million.
“In the 21 years our team has been prosecuting market manipulation cases against Wall Street, I believe this could be one of the top five biggest spoofing/market manipulation cases we have handled,” James Wes Christian of Christian Attar Group said in a news release. “After working with our consulting and investigative experts, I believe the damage model could be in excess of US$700 million.”
Velvel Freedman, partner at Freedman Normand Friedland LLP and co-lead counsel in this case, believes that, “This is an important lawsuit for our client for several reasons, including the enormous magnitude of the alleged spoofing activities; the potentially devastating adverse impact that activity on the price of Quantum Biopharma’s shares; and the commitment of Quantum’s management to protect the value of shareholder equity in the company.”
“We believe that the company and its shareholders have suffered immensely from defendants’ trading practices, including those described in the complaint,” Quantum’s CEO and founder, Zeeshan Saeed, said.
Formerly known as FSD Pharma, Quantum BioPharma operates in two segments: biotechnology and strategic investments.
Its biotechnology segment is focused on furthering the research and development of its two primary drug candidates, including Lucid 21-302 and Lucid-PSYCH, as well as the development of UNBUZZD.
Shares of Quantum BIoPharma (CSE:QNTM) opened trading at C$10.63. Its stock has fallen 99.84 per cent since the beginning of the year.
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