Facts

Arrayit Corporation is a biotechnology company focused on developing and manufacturing of proprietary life science technologies. Arrrayit's common stock was registered with the Securities and Exchange Commission and Arrayit was required to file quarterly and annual reports with the SEC. Plaintiff, the Securities and Exchange Commission filed a complaint against defendants Arrayit Corporation and its Chief Executivie Officer, Rene Schena for violation of Section 10(b) of the Securities Exchange of Act of 1934 and Section 13(a) of the Exchange Act.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that defendants misled investors by making false and misleading statements about the status of defendant's delinquent financial reports. In addition, from March 2020 to April 2020 during the COVID-19 pandemic, plaintiff contended that defendant once again made a series of false and misleading statements with respect to the status of the company's development of a COVID-19 Test. Due to these false and misleading statements, the price and trading of Arrayit's stock surged upward.

DEFENDANTS' CONTENTIONS: Defendants denied plaintiff's contentions.

Result

Defendants agreed to the final judgment where the district court ordered defendants permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Section 13(a) of the Exchange Act. In addition to the proposed judgments, defendant Schena agreed to pay $50,000 in civil penalties.