Washington D.C. -- The Securities and Exchange Commission today charged Mark Schena, the President and Chief Science Officer of Arrayit Corporation, for making allegedly false and misleading statements concerning Arrayit's development of a COVID-19 blood test and its intention to resolve its delinquency in filing required periodic reports with the SEC.
According to the SEC's complaint, in March and April 2020, Schena falsely claimed that Arrayit had developed a COVID-19 blood test when it had not yet purchased materials to make a test. As alleged, Schena also falsely asserted that the test had been submitted for emergency approval, and falsely boasted to investors that there was a high demand for the test. The complaint also alleges that between October 2018 and March 2019, Schena misled investors by claiming that Arrayit was preparing to become current on delinquent periodic filings with the SEC for the first time since November 2015. According to the complaint, however, Arrayit had failed to provide the necessary documents and financial information to its independent auditor, which was unable to complete its audit of the company's financial statements for 2014 and 2015.
"We allege that Mark Schena took advantage of the COVID-19 pandemic at the expense of investors," said Erin E. Schneider, Director of the SEC's San Francisco Regional Office. "A pandemic does not exempt public company executives from their responsibility to make accurate disclosures."
The Commission previously suspended trading in Arrayit's securities from April 14, 2020, through April 27, 2020.
The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Schena with violating antifraud provisions of the federal securities laws and seeks a permanent injunction, a civil money penalty, and an officer and director bar against him.
The Office of Investor Education and Advocacy and Division of Enforcement's Retail Strategy Task Force have issued Investor Alerts about fraudulent scams related to the Coronavirus (COVID-19) pandemic. The SEC also has information available on microcap stocks, including red flags to look for when investing in such securities. Additional information is available on Investor.gov.
The SEC's investigation was conducted by Fitzann R. Reid and John K. Han, and supervised by Jason H. Lee and Monique C. Winkler, of the San Francisco Regional Office. The litigation will be led by Mr. Han and Ms. Reid. The SEC appreciates the assistance of the U.S. Department of Justice.
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