Charleston syringe maker sued for fraud by stock market regulator
Federal securities regulators are suing a small Charleston-based company and its chief executive officer for fraud, alleging the firm issued misleading statements that helped juice the price of its stock.
The Securities and Exchange Commission named Revolutions Medical Corp. and Ron Wheet as defendants in the complaint.
The agency said the fraudulent statements about the status of the company’s main product, a retractable syringe, were made between August 2010 and July 2011.
The statements included a series of news releases “designed to convey the impression that, among other things,” that the device was ready to be distributed and that the company “had entered into, or was on the cusp of entering into, mass distribution agreements, including a sales agreement with the U.S. Department of Defense,” according to the lawsuit filed Friday in Atlanta.
The complaint went on to say that the company’s stock price rose after the press releases, which enabled Revolutions Medical to raise money more cheaply through an agreement it had with a Boston investment firm.
The SEC said the company and Wheet knew the syringe was not ready to be marketed and that there was no contract with the Defense Department.
Wheet was not immediately available for comment.
Revolution Medical’s stock trades through a quotation service called the Pink Sheet under the symbol RMCP. Shares closed at 18.7 cents Friday. Shares were down to about 15 cents at midday today in heavier than normal trading activity.
See Tuesday’s editions of The Post and Courier for more details.