Washington • The Securities and Exchange Commission this week suspended trading of a Salt Lake City company’s stock after it touted production of a rapid test for COVID-19, a move that comes as the regulatory agency continues to crack down on companies promoting unproven products relating to the coronavirus outbreak.
© Andrew Harnik
(Andrew Harnik | AP file photo) This Aug. 5, 2017, file photo, shows the U.S. Securities and Exchange Commission building in Washington.
The SEC halted trading of stock in Predictive Technology Group, Inc., on Wednesday morning through May 5 “because of questions regarding the accuracy and adequacy of information in the marketplace concerning” the company, according to an order issued by the agency.
The firm, whose board includes former Sen. Orrin Hatch, had issued three press releases claiming it was going to be able to immediately distribute large quantities of a serology test to detect COVID-19 antibodies.
Predictive Technology Group CEO Bradley Robinson said that by working through its distribution partner, Wellgistics, it could deliver 1 million tests for use by laboratories and health care workers.
“This country is in high need of the Assurance AB testing for point of care use and we have brought all resources to bear to bring this product to the United States,” Robinson said in a news release April 8. “Wellgistics has provided us with state-by-state demand guidance, to ensure that regions with the most urgent need have first access to the test. Our main priorities will be to focus on servicing those areas.”
The SEC shut down the stock trading after questions about the accuracy of statements by the company, whose stock closed at 82 cents on Wednesday morning.
“The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company,” the SEC said in a statement.
Neither Predictive Technology nor the Orrin G. Hatch Foundation responded to requests for comment on Friday.
Hindenburg Research had previously questioned Predictive Technology’s announcement, which noted that it was partnering with a Chinese manufacturer to make and distribute a rapid test for COVID-19. Hindenburg reported that the Chinese company was not an approved manufacturer of the test by the Chinese government and news reports by state-run outlets said that it had been selling them without medical or production licenses.
Nathan Anderson, a partner at Hindenburg Research, who had raised red flags about Predictive Technology, wrote that analysis showed the company “must continue to dilute equity through near-term stock sales in order to survive.”
On Friday, Anderson said the SEC made the right move.
“People are looking for signs of hope in this pandemic and unfortunately there seem to be some people taking advantage of that,” Anderson said in an email to The Salt Lake Tribune. “We’ve seen dozens of stock scams that have emerged since the onset of this pandemic. The SEC has been very diligent in protecting the public and the markets from these suspected bad actors.”