Jan 17, 2018 | Shareholder & Investor Protection
SEC Chairman and Commissioners Issue Statement Regarding NASAA’s Reminder to Investors to Use Caution When Approaching Cryptocurrencies, ICO’s & Other Cryptocurrency-Related Investment Products
On January 4, 2018, SEC ChairmanJay Clayton and Commissioners Kara M. Stein and Michael S. Piwowar issued a statement “commend[ing] the North American Securities Administrators Association . . . on their release highlighting important issues and concerns related to cryptocurrencies, initial coin offerings (ICOs) and other cryptocurrency-related investment products.”
The statement of the SEC Chairman and Commissioners also stated that
NASAA’s release is a timely and thoughtful reminder to Main Street investors to exercise caution. The release recognizes that cryptocurrencies, while touted as replacements for traditional currencies, lack many important characteristics of traditional currencies, including sovereign backing and responsibility, and now are being promoted more as investment opportunities than efficient mediums for exchange.
The NASAA release also reminds investors that when they are offered and sold securities they are entitled to the benefits of state and federal securities laws, and that sellers and other market participants must follow these laws. Unfortunately, it is clear that many promoters of ICOs and others participating in the cryptocurrency-related investment markets are not following these laws. The SEC and state securities regulators are pursuing violations, but . . . again caution . . . that, if [one] lose[s] money, there is a substantial risk that [regulatory] efforts will not result in a recovery of [one’s] investment. [Emphasis added]
The SEC’s statement also encouraged investors to read NASAA’s release and, importantly, to note the common “red flags” of investment fraud that NASAA’s release mentions, in addition to reviewing the following SEC investor-related bulletins, alerts, reports, and statements:
Image: Pixabay, Gerd Altmann (geralt), CC0 Creative Commons License
NASAA’s Reminder to Cryptocurrency & Initial Coin Offering Investors
NASAA’s investor reminder (“NASAA Reminds Investors to Approach Cryptocurrencies, Initial Coin Offerings and Other Cryptocurrency-Related Investment Products with Caution”) advises “Main Street” investors use caution when investing in cryptocurrencies. NASAA’s cryptocurrency investor reminder, among other things, stated:
Cryptocurrencies are a medium of exchange that are created and stored electronically in the blockchain, a distributed public database that keeps a permanent record of digital transactions. Current common cryptocurrencies include Bitcoin, Ethereum and Litecoin. Unlike traditional currency, these alternatives have no physical form and typically are not backed by tangible assets. They are not insured or controlled by a central bank or other governmental authority, cannot always be exchanged for other commodities, and are subject to little or no regulation. [Emphasis added]
A NASAA survey of state and provincial securities regulators shows 94 percent believe there is a “high risk of fraud” involving cryptocurrencies. Regulators also were unanimous in their view that more regulation is needed for cryptocurrency to provide greater investor protection. [Emphasis added]
NASAA’s investor reminder also quoted NASAA President and Director of the Alabama Securities Commission, Joseph P. Borg, who stated that “Cryptocurrencies and investments tied to them are high-risk products with an unproven track record and high price volatility. Combined with a high risk of fraud, investing in cryptocurrencies is not for the faint of heart.”
Initial Coin Offerings & Cryptocurrency-Related Investments: “Emerging Investor Threats”
NASAA’s reminder also stated that last month ICO’s and cryptocurrency-related investment products were identified as emerging investor threats for 2018. According to NASAA:
Unlike an Initial Public Offering (IPO) when a company sells stocks in order to raise capital, an ICO sells “tokens” in order to fund a project, usually related to the blockchain. The token likely has no value at the time of purchase. Some tokens constitute, or may be exchangeable for a new cryptocurrency to be launched by the project, while others entitle investors to a discount, or early rights to a product or service proposed to be offered by the project. [Emphasis added]
NASAA’s “Get in the Know About ICOs” Video, Common Cryptocurrency Concerns & Common Red Flags of Fraud
For investors, NASAA’s reminder identified common concerns to consider before investing in cryptocurrency, as well as reminded investors to look for the common “red flags” of investment fraud, such as “guaranteed” high investment returns, investment claims which “sound too good to be true,” “pressure to buy immediately,” and unlicensed individuals or investment firms.
Lastly, NASAA provided an animated video, “Get in the Know About ICOs,” to assist investors understand the risks associated with cryptocurrency and Initial Coin Offerings.
Image: Pixabay, Gerd Altmann (geralt), CC0 Creative Commons License
Please click Kehoe Law Firm, P.C. for more information about Initial Coin Offerings and cryptocurrency, as well as other securities- and consumer-related class action matters.
Jan 16, 2018 | Securities Class Action Archive
TSRO – TESARO, Inc. Update to VARUBI® (rolapitant) U.S. Prescribing Information – TSRO Stock Falls During Intraday Trading
Kehoe Law Firm’s investigation concerns whether TESARO and certain of its officers or directors have engaged in securities fraud or other unlawful business practices.
On January 12, 2018, TESARO announced that it had updated the VARUBI® (rolapitant) injectable emulsion package insert in collaboration with the FDA. The update regarding VARUBI® (rolapitant), indicated for the prevention of delayed nausea and vomiting associated with chemotherapy, resulted from receiving reports of “[a]naphylaxis, anaphylactic shock and other serious hypersensitivity reactions . . . in the postmarketing setting, some requiring hospitalization.” Further, TESARO stated that TESARO “issued a Dear Healthcare Professional (DHCP) letter,” which, along with the “updated full prescribing information,” is available on the VARUBI website.
TESARO’s share price, on this news, fell sharply during intraday trading on January 16, 2018.
“TESARO Announces Updates to the U.S. Prescribing Information for VARUBI® (rolapitant) Injectable Emulsion”
According to TSRO’s January 12, 2018 announcement:
TESARO . . . an oncology-focused biopharmaceutical company, . . . announced that it has updated the VARUBI® (rolapitant) injectable emulsion package insert in collaboration with the U.S. Food and Drug Administration (FDA). VARUBI injectable emulsion is a substance P/neurokinin (NK-1) receptor antagonist indicated for the prevention of delayed nausea and vomiting associated with chemotherapy in adults. The changes to the labeling include modifications to the CONTRAINDICATIONS, WARNINGS and PRECAUTIONS, and ADVERSE REACTIONS sections.
Following its introduction in late November 2017, TESARO estimates that at least 7,000 doses of VARUBI injectable emulsion have been administered to patients receiving emetogenic chemotherapy in the United States. Anaphylaxis, anaphylactic shock and other serious hypersensitivity reactions have been reported in the postmarketing setting, some requiring hospitalization. These reactions have occurred during or soon after the infusion of VARUBI injectable emulsion. Most reactions have occurred within the first few minutes of administration. [Emphasis added]
TSRO’s “Dear Health Care Provider Letter”
TESARO’s Dear Health Care Provider Letter, among other things, stated:
The purpose of this letter is to inform you of important safety information for VARUBI® (rolapitant) injectable emulsion, a substance P/neurokinin (NK-1) receptor antagonist indicated for the prevention of delayed nausea and vomiting associated with cancer chemotherapy in adults.
Anaphylaxis, Anaphylactic Shock and Other Serious Hypersensitivity Reactions Associated with Use of VARUBI® (rolapitant) Injectable Emulsion
Anaphylaxis, anaphylactic shock and other serious hypersensitivity reactions have been reported in the postmarketing setting, some requiring hospitalization. These reactions have occurred during or soon after the infusion of VARUBI® (rolapitant) injectable emulsion. Most reactions have occurred within the first few minutes of administration. Symptoms of anaphylaxis can include wheezing or difficulty breathing; swelling of the face or throat; hives or flushing; itching; abdominal cramping, abdominal pain or vomiting; back pain or chest pain; hypotension or shock.
TSRO – TESARO Investors & Shareholders
Kehoe Law Firm, P.C. is investigating whether TESARO and certain of TESARO’s officers or directors engaged in securities fraud or other unlawful business practices. If you invested in TSRO securities and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 16, 2018 | Consumer Protection, Employment & Technology Archive
Former T.J. Maxx Loss Prevention Detective Files Collective Action Complaint
Unpaid Overtime Pay Sought by Former T.J. Maxx Loss Prevention Detective
An overtime pay collective action lawsuit (Mills v. T.J. Maxx, Inc., No. 17-05236) was filed in United States District Court, Northern District of Georgia, Atlanta Division, against T.J. Maxx, an operator of multiple retail stores across the United States. Plaintiff Aaron Mills, who served as a T.J. Maxx Loss Prevention Detective in multiple locations in Georgia during his T.J. Maxx employment, filed the class action lawsuit to recover unpaid overtime pay owed pursuant to the Fair Labor Standards Act (“FLSA”).
T.J. Maxx Loss Prevention Detectives, Loss Prevention Associates & Others Similarly Situated
The collective action was brought under the FLSA on behalf of the Plaintiff and all individuals employed since December 18, 2015 by T.J. Maxx as a Loss Prevention Detective, Loss Prevention Associate, and all other similarly situated hourly employees.
T.J. Maxx, according to the complaint, employed Plaintiff as a Loss Prevention Detective from October 1, 2016 until September 28, 2017. The Plaintiff worked at various T.J. Maxx locations in Atlanta, Georgia and his duties included such things as investigating incidents of internal theft throughout a high volume multi-store environment, conducting fact-finding, installing covert cameras, reviewing media, and resolving internal theft cases with the help of a national task force.
The overtime collective action complaint alleges that the Plaintiff
. . . was assigned to work 40 hours per week by T.J. Maxx. However, in actuality, [Plaintiff] Mills worked 45 hours each week, as a result of being required to work off-the-clock 5 hours each week in order to respond to phone calls and e-mails from his supervisor for loss prevention cases. These off-the-clock e-mails and calls would occur before his shift, after his shift, and on weekends.
[Plaintiff] Mills was paid $14.93 per hour, and worked 45 hours per week. [Plaintiff] Mills was generally paid $597.20 per week reflecting only being paid for 40 hours of work. [Plaintiff] Mills was never compensated for this extra 5 hours of time worked. [Emphasis added]
[The Plaintiff] was frequently called and e-mailed by his direct supervisor . . . despite being off-the-clock, and expected to respond to his supervisor’s needs at all times.
Plaintiff was also called to testify at various hearings for his employment, and would not be compensated for all hours worked while testifying or appearing in court.
Plaintiff was paid straight-time for the first 40 hours worked, despite working well in excess of 40 hours per week.
This failure to pay overtime wages to this hourly employee can only be considered a willful violation of the FLSA, within the meaning of 29 U.S.C. § 255(a).
T.J. Maxx Loss Prevention Detective Seeks More Than $20K in Unpaid Overtime Damages
The former Loss Prevention Detective, according to the collective action overtime pay complaint,
. . . worked 45 hours per week, which includes 40 regular hours and 5 overtime hours. [The Plaintiff] was paid straight-time for the first 40 hours worked. His rate of pay was $14.93 per hour, so his “one-and-half-times-rate” is $22.40 per hour, for the purposes of computing overtime.1 5 overtime hours multiplied by $22.40 oneand- half-times-rate, equals $112 unpaid overtime per week. [The Plaintiff] was employed 102 weeks by Defendant. 102 weeks multiplied by $112 unpaid overtime per week, equals $11,424 in unpaid overtime wages. If the Court grants liquidated damages in this case, pursuant to 29 U.S. Code § 216(b), then the total damages are $11,424 plus $11,424, which equals $22,848.
Image: “T.J. Maxx, Peabody, Massachusetts,” Anthony92931, Wikimedia Commons, CC BY-SA 3.0.
T.J. Maxx Loss Prevention Detectives & Loss Prevention Associates
If you serve or served as a T.J. Maxx Loss Prevention Detective, T.J. Maxx Loss Prevention Associate or other similar position and believe you have legal claims for unpaid overtime, please contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], complete the form above on the right or e-mail [email protected].
Jan 15, 2018 | Consumer Protection, Employment & Technology Archive
CellMark Biopharma, LLC & CEO Barred From Making Deceptive Claims About The Ability of CellAssure and Cognify to Mitigate Side Effects of Cancer Treatment
On January 11, 2018, the FTC issued a press release concerning the settlement of FTC charges against CellMark Biopharma and CellMark’s CEO, Derek E. Vest, for making false or unsupported claims regarding health products they marketed as effective treatments for cancer-related malnutrition and cancer treatment-related cognitive dysfunction, also known as “chemo fog.”
Deceptive Marketing of CellAssure & Cognify
According to the FTC’s press release:
According to the [FTC’s] complaint, CellMark and its CEO, Derek E. Vest, violated the FTC Act by deceptively advertising two products for cancer patients: CellAssure, to treat cancer-related malnutrition, and Cognify, to treat “chemo fog.” A one-month supply of CellAssure sold for $248 and a one-month supply of Cognify sold for $79.
The FTC alleges that the defendants advertised the two products with a range of deceptive and unsupported health benefits for cancer patients. For example, the defendants described CellAssure as a medical breakthrough solution that “specifically addresses the malnutrition suffered by over 80% of all cancer patients” and claimed that CellAssure treats cancer with its “anti-cancer and anti-tumor properties.”
The defendants described Cognify as “the world’s first product designed specifically to alleviate . . . chemo fog . . . .” They also disseminated a YouTube video featuring a breast cancer patient who claimed that after taking Cognify, she could “remember the names of places and people and things” and started “thinking more clearly.” However, according to the FTC complaint, the defendants did not possess scientific evidence that these products provided any of the claimed benefits.
The proposed final stipulated order settling the Commission’s charges prohibits the defendants from engaging in similar conduct in the future. It requires them to have competent and reliable scientific evidence to support health claims for any product, and bars them from misrepresenting the results of any study, test, or scientific research.
FTC Fights Against Deceptive Marketing of Unproven Cancer Treatments
The FTC’s blog posting related to the FTC’s settlement with CellMark Biopharma and its CEO (“FTC challenges claims that products could treat side effects of cancer treatment”) stated:
Two serious complications of cancer treatment are cachexia (the wasting syndrome some patients experience) and “chemo fog” (the chemotherapy-related cognitive dysfunction that patients often report). CellMark [Biopharma] claimed to have the answer to both problems.
Selling for $248 for a one-month supply, CellAssure was advertised to treat cachexia and cancer-related malnutrition. In addition, according to the FTC, the defendants conveyed to consumers that CellAssure would improve cancer patients’ ability to withstand the rigors of surgery, radiation, and chemotherapy. But that’s not all. The defendants also claimed that the product “exhibits anti-cancer/anti-tumor effects” and that CellAssure’s ingredients had been “clinically proven” to provide the advertised benefits.
Marketed to treat the memory loss and cognitive impairment sometimes reported during and after chemotherapy, a one-month supply of Cognify cost cancer patients $79. According to ads, Cognify would “protect brain cells/neuro-transmitters against toxins,” “improve cognitive functioning, memory, and processing,” and “stimulate the growth of new brain cells” in patients undergoing chemo. The company used a similar “don’t just take our word for it” tactic by claiming that Cognify’s ingredients were “clinically proven.”
But according to the FTC, the defendants didn’t have sound science to back up their promises. What’s more, the complaint charges that the company’s “clinically proven” claims were false. [Emphasis added]
The settlement in the case requires the defendants to have randomized, double-blind, placebo-controlled testing conducted by qualified researchers to support future cancer- or disease-related claims for dietary supplements, foods, or drugs. Other health claims will need “competent and reliable scientific evidence,” as that phrase is defined in the order. The settlement also prohibits misrepresentations about tests, studies, or research.
The terms of the settlement apply just to CellMark and CEO Derek Vest – who . . . is serving time in federal prison for criminal conduct related to the sale of other dietary supplements. But the case reminds marketers just how seriously the FTC takes claims directed to cancer patients and others battling serious medical conditions. [Emphasis added]
Source: FTC.gov
Jan 15, 2018 | Securities Class Action Archive
Liberty Tax Stock Shareholders: Alleged Ineffective Internal Controls & Inaccurate Financial Reporting
Kehoe Law Firm, P.C. continues its investigation to determine whether Liberty Tax and certain of its officers or directors engaged in securities fraud or other unlawful business practices to the detriment of Liberty Tax stockholders.
On January 12, 2018, a class action lawsuit was filed in United States District Court, Eastern District of New York, on behalf of all persons and entities, other than the Defendants and their affiliates, who purchased Liberty Tax securities between June 29, 2016 and December 11, 2017, both dates inclusive (the “Class Period”).
The Liberty Tax shareholder class action (Mauro v. Liberty Tax, Inc., et al, No. 18-00245) seeks to recover damages caused by the Liberty Tax Defendants’ alleged violations of federal securities laws.
According to the Liberty Tax class action complaint:
Throughout the Class Period, [Liberty Tax] Defendants made a series of false and misleading statements regarding [Liberty Tax’s] disclosure controls and procedures. For example, although [Liberty Tax] Defendants told the investing public that [Liberty Tax] maintained effective internal controls to ensure the accuracy of its financial reporting, investors ultimately learned the opposite was true, i.e. [Liberty Tax’s] internal controls were ineffective and did not ensure accurate financial reporting. The market learned the truth on December 11, 2017, when Liberty Tax filed a Form 8- K with the SEC announcing the sudden resignation of its independent registered public accounting firm, and stated that [Liberty Tax] would delay the filing of its quarterly report on Form 10-Q for the quarter ended October 31, 2017. The market was shocked by this revelation, which caused Liberty Tax stock to react violently, losing 6.3% of its value that day. [Emphasis added]
Liberty Tax Discloses Resignation of Independent Registered Public Accounting Firm KPMG LLP
On December 11, 2017, Liberty Tax, Inc. issued a press release disclosing that KPMG LLP resigned as the independent registered public accounting firm of Liberty Tax and that Liberty Tax will delay the filing of its Quarterly Report on Form 10-Q for the quarter ended October 31, 2017.
According to Liberty Tax’s Form 8-K, dated December 11, 2017 (Liberty Tax_Form 8-K):
KPMG expressed to the Audit Committee and [Liberty Tax] management its concern that the actions of former Chief Executive Officer John T. Hewitt . . . have created an inappropriate tone at the top which leads to ineffective entity level controls over the organization. Prior to the termination of Mr. Hewitt’s employment as Chief Executive Officer of the Company on September 5, 2017, the Audit Committee oversaw an investigation of allegations of misconduct by Mr. Hewitt. In particular, KPMG noted that Mr. Hewitt took actions to replace two independent members of the Board around the time information relating to this investigation appeared in media reports. KPMG also noted that following the replacement by Mr. Hewitt of two Class B directors, the chair of the Audit Committee retired from the Board, the Company’s Chief Financial Officer announced her intention to resign from the Company, and another independent member of the Board announced that he would not stand for reelection at the Company’s next annual meeting. Further, KPMG was made aware that following his termination as Chief Executive Officer, Mr. Hewitt may have continued to interact with franchisees and area developers of the Company. Although Mr. Hewitt stated to KPMG during a meeting on November 9, 2017 that he would not reinsert himself into the management of the Company, in light of Mr. Hewitt’s actions and his ability to control the Board as the sole holder of the Class B common stock, KPMG informed the Audit Committee and management that it has concerns regarding the Company’s internal control over financial reporting as related to integrity and tone at the top and such matters should be evaluated as potential material weaknesses. [Emphasis Added]
Specifically, KPMG informed the Audit Committee and management that Mr. Hewitt’s past and continued involvement in the Company’s business and operations, including his continued interactions with franchisees and area developers of the Company, has led it to no longer be able to rely on management’s representations, and therefore has caused KPMG to be unwilling to be associated with the Company’s consolidated financial statements. In notifying the Company of its resignation, KPMG advised the Audit Committee and management that it is not aware of any information that cause it to question the integrity of current management, but rather that the structural arrangement by which Mr. Hewitt controls the Company is the cause of KPMG’s concerns. KPMG also noted that because certain information known to the Board regarding the reasons that the Board terminated Mr. Hewitt as Chief Executive Officer had not been disclosed to the current Chief Executive Officer and Chief Financial Officer, KPMG was uncertain as to whether it could continue to rely on management’s representations. [Emphasis Added]
On this news, the share price of Liberty Tax stock fell $0.80 per share, which was more than 6% from the previous Liberty Tax stock closing price, to close at $11.15 per share on December 11, 2017.
Liberty Tax Post Class Period Developments – Bloomberg Reports & Notice of Delinquent Filing
According to the class action complaint, Bloomberg published an article, “Liberty Tax Sec Scandal Draws Investor Suit Targeting Hewitt,” which, among other things, stated that “[a] pension fund is asking a judge to order Hewitt to relinquish his controlling stake in the national tax-preparation service after an internal review found that while running the company, he had sex in his office and hired relatives of female employees with whom he’d had romantic relationships.” Bloomberg also, according to the class action complaint, reported that “Liberty Tax has tumbled 15 percent since Sept. 5, the day before the company fired Hewitt as CEO without disclosing the reasons.[]” [Emphasis added]
Additionally, according to the class action complaint, Liberty Tax issued a press release on December 19, 2017 advising that Liberty Tax, as a result of its failure to timely file its Form 10-Q for the fiscal quarter ending October 31, 2017, received a delinquent filing compliance notice from Nasdaq.
Have You Purchased or Acquired Liberty Tax Stock Shares?
If you purchased or otherwise acquired Liberty Tax (NASDAQ:TAX) stock shares between June 29, 2016 and December 11, 2017, both dates inclusive, and would like to speak privately with a securities attorney to learn whether you may have legal claims, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].
