An investigation on behalf of investors of RenovaCare, Inc. (OTC: RCAR) shares over potential securities laws violations by RenovaCare, Inc. and certain of its directors and officers in connection with certain financial statements was announced.
The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of RenovaCare, Inc. (OTC: RCAR) concerning whether a series of statements by RenovaCare, Inc. regarding its business, its prospects and its operations were materially false and misleading at the time they were made.
Roseland, NJ based RenovaCare, Inc., a development-stage biotech and medical device company, focuses on the research, development, and commercialization of autologous cellular therapies for use in medical and aesthetic applications.
On May 28, 2021, the United States Securities and Exchange Commission (“SEC”) published a litigation release indicating the RenovaCare, Inc. was being charged with securities fraud. Specifically, the complaint referenced in the litigation release, filed in federal court in the Southern District of New York, alleges that in July 2017, Harmel S. Rayat, RenovaCare's controlling shareholder, arranged, and caused RenovaCare to pay for, a promotional campaign designed to increase the company's stock price." The complaint alleges that "Rayat was closely involved in directing the promotion and editing promotional materials, and arranged to funnel payments to the publisher through consultants to conceal RenovaCare's involvement in the campaign" and according to the complaint, "in January 2018, OTC Markets Group, Inc. requested RenovaCare issue a press release to explain its relationship to the promotion." Finally, the complaint alleges that "Rayat and RenovaCare then drafted and issued a press release and a Form 8-K that contained material misrepresentations and omissions denying Rayat's and the company's involvement in the promotion" and charges Rayat and RenovaCare with "violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and also charges Rayat with aiding and abetting the company's violations of those provisions." The complaint also charges RenovaCare with violating the reporting provisions of Exchange Act Section 15(d) and Rules 15d-11 and 12b-20 thereunder.
Shares of RenovaCare, Inc. (OTC: RCAR) declined to as low as $1.45 per share on June 2, 2021.