Chromadex Corp. (NASDAQ: CDXC) is in the spotlight after a report recently alleged a possible violation of securities laws. The company has already termed the author of the negative report as a shortseller seeking to profit from the decline in its stock price. Chromadex said it was planning to provide a comprehensive response to the shortseller attack.
But not everyone is taking the company at its word. A law firm called Goldberg Law PC that deals in securities litigations has already given a notice that it is investigating the company and its officers. The investigations have been triggered by the report that alleged that a group of so-called puppet directors and officers may have been used to control Chromadex at the expense of other shareholders.
It is alleged that Barry Honig is the one who used stooges in Chromadex Corp (NASDAQ: CDXC) to control the company. If the claims are proven to be true, they would amounts to violation of securities laws. Shareholders can sue Chromadex over such violations and seek compensation if they suffered losses because of the irregularity. In particular, the issue will focus on whether the management of Chromadex misrepresented information to keep shareholders in the dark over the alleged violations.
Goldberg Law has called on those who purchased or in any other way acquired shares of Chromadex to contact it, possibly to discuss their rights in the issue of misrepresentation of facts that has been exposed by Bleecker Street Research.
CDXC mum on puppet claims
But Chromadex Corp (NASDAQ: CDXC) hasn’t said a word about allegation that an outsider used some insiders of the company has stooges to exert undue control of the company. However, in a brief press release, the company said that the author of the negative report attacking its reputation is nothing more than a shortseller or shortsellers seeking quick profits by triggering a descent in the stock price.
Although a comprehensive response has been promised, there was no exact date given when the response will be issued.
Chromadex Corp. (NASDAQ: CDXC) and short-selling activity
The shortseller attack on Chromadex Corp. (NASDAQ: CDXC) comes just after the company recently raised $5.25 million through the sale of equity to enable it raise funds to retire some of its outstanding notes.