SEC Charges Company and Two Executives for Misleading COVID-19 Disclosures
The SEC charged Parallax Health Sciences Inc., CEO Paul Arena, and CTO Nathaniel Bradley with making false claims about the imminent availability of a COVID-19 screening test and PPE despite insolvency and lack of FDA approval, resulting in a settlement with monetary penalties and an officer ban.
The SEC alleged that Parallax Health Sciences Inc., its CEO Paul Arena, and CTO Nathaniel Bradley made false statements in 2020 claiming their COVID-19 screening test and personal protective equipment (PPE) would be 'available soon,' even though the company was insolvent and lacked FDA clearance. These actions violated Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act by artificially inflating the company’s stock price. To settle, Parallax agreed to pay a $100,000 penalty, Arena to pay $45,000 and accept a five-year ban from serving as an officer or director of a public company.
The SEC charged Parallax Health Sciences Inc., its CEO Paul Arena, and CTO Nathaniel Bradley with securities fraud for making misleading public statements in 2020 that the company’s COVID-19 screening test and personal protective equipment (PPE) would be available for sale imminently. The allegations revealed that Parallax was insolvent, lacked regulatory approvals from the FDA, and had no ability to develop or acquire the products it claimed to be ready to sell. These false statements were designed to artificially inflate the company’s stock price, misleading investors and violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act. To resolve the charges without admitting or denying wrongdoing, Parallax agreed to pay a $100,000 civil penalty. Paul Arena agreed to pay a $45,000 penalty and accepted a five-year ban from serving as an officer or director of any public company. Nathaniel Bradley also consented to the settlement terms, though specific penalties for him were not detailed in the provided summaries. The case underscores the SEC’s enforcement focus on pandemic-related fraud and the consequences of deceptive disclosures in volatile markets.
Exhibits & Attached Documents (1)
Extracted insights
- $100K $100,000 $100K–$1M
- $45K $45,000 $10K–$100K
- $40K $40,000 $10K–$100K
- person misleading statements
- person nathaniel bradley
- company parallax health sciences inc.
- person paul arena
- agency Securities and Exchange Commission
- SEC announced charges against Parallax Health Sciences Inc.
- Parallax Health Sciences Inc. made misleading statements about COVID-19 efforts
- Paul Arena charged for role in misleading statements
- Nathaniel Bradley charged for role in misleading statements
- SEC suspended trading in Parallax Health Sciences Inc. common stock on April 10, 2020
- Parallax Health Sciences Inc. issued press releases claiming COVID-19 screening test would be available soon
- Parallax Health Sciences Inc. falsely claimed it had medical and PPE for immediate sale
- Paul Arena drafted misleading press releases to boost stock price
- Parallax Health Sciences Inc. violated Sections 17(a)(1) and (3) of Securities Act of 1933 and Section 10(b) of Securities Exchange Act of 1934
- Paul Arena violated Sections 17(a)(1) and (3) of Securities Act of 1933 and Section 10(b) of Securities Exchange Act of 1934
- Nathaniel Bradley violated Section 17(a)(3) of Securities Act of 1933
- Parallax Health Sciences Inc. agreed to pay $100,000 penalty
- Paul Arena agreed to pay $45,000 penalty
- Nathaniel Bradley agreed to pay $40,000 penalty
- Paul Arena prohibited for five years from acting as public company officer or director
- Nathaniel Bradley prohibited for three years from participating in penny stock offering
The Securities and Exchange Commission today announced charges against Parallax Health Sciences Inc. for making misleading statements about its efforts to fight COVID-19. The SEC also charged Parallax’s Chief Executive Officer Paul Arena and its Chief Technology Officer Nathaniel Bradley for their roles in the statements. Each party has offered to settle the charges. The SEC temporarily suspended trading in Parallax’s common stock on April 10, 2020, due to questions about the accuracy of the company’s statements. According to the SEC’s complaint filed in the U.S. District Court for the Southern District of New York, Parallax issued a series of press releases in March and April 2020 falsely claiming that its purported COVID-19 screening test would be “available soon” and that it had medical and personal protective equipment (PPE) for “immediate sale.” The complaint alleges that Parallax’s insolvency prevented it from developing the screening test, and that the company’s projections showed that even if the company had the funds, it would take more than a year to develop the test. The complaint also alleges that Parallax never had the medical equipment or PPE it offered for sale and that several factors prevented the company from acquiring the equipment, including that it did not have enough money to purchase the equipment and that it lacked the Food and Drug Administration registrations required to import and sell the equipment. Additionally, the complaint alleges that Arena drafted the misleading press releases to boost Parallax’s declining stock price, and that the company’s stock price increased after they were disseminated. “We allege that Parallax misled investors that the company was positioned to capitalize on opportunities created by the COVID pandemic. Such misinformation jeopardized investors at precisely the moment when investors were attempting to respond to the financial implications of a public health emergency,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office. The SEC’s complaint alleges that Parallax and Arena violated Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Bradley violated Section 17(a)(3) of the Securities Act. Without admitting or denying the SEC’s allegations, Parallax, Arena, and Bradley consented to judgments permanently enjoining them from future violations of the charged provisions and requiring them to pay penalties of $100,000, $45,000, and $40,000, respectively. Arena also agreed to be prohibited for five years from acting as a public company officer or director and from participating in an offering of penny stock. Bradley, who assisted Arena in drafting two of the misleading press releases, agreed to be prohibited for three years from participating in an offering of penny stock. The settlements are subject to court approval. The SEC’s case is being handled by Andy Palid, Sue Curtin, Rua Kelly, Al Day and Michele Perillo of the Boston Regional Office. The Commission appreciates the assistance provided by the Financial Industry Regulatory Authority and the U.S. Food and Drug Administration.
The Securities and Exchange Commission today announced charges against Parallax Health Sciences Inc. for making misleading statements about its efforts to fight COVID-19. The SEC also charged Parallax’s Chief Executive Officer Paul Arena and its Chief Technology Officer Nathaniel Bradley for their roles in the statements. Each party has offered to settle the charges. The SEC temporarily suspended trading in Parallax’s common stock on April 10, 2020, due to questions about the accuracy of the company’s statements. According to the SEC’s complaint filed in the U.S. District Court for the Southern District of New York, Parallax issued a series of press releases in March and April 2020 falsely claiming that its purported COVID-19 screening test would be “available soon” and that it had medical and personal protective equipment (PPE) for “immediate sale.” The complaint alleges that Parallax’s insolvency prevented it from developing the screening test, and that the company’s projections showed that even if the company had the funds, it would take more than a year to develop the test. The complaint also alleges that Parallax never had the medical equipment or PPE it offered for sale and that several factors prevented the company from acquiring the equipment, including that it did not have enough money to purchase the equipment and that it lacked the Food and Drug Administration registrations required to import and sell the equipment. Additionally, the complaint alleges that Arena drafted the misleading press releases to boost Parallax’s declining stock price, and that the company’s stock price increased after they were disseminated. “We allege that Parallax misled investors that the company was positioned to capitalize on opportunities created by the COVID pandemic. Such misinformation jeopardized investors at precisely the moment when investors were attempting to respond to the financial implications of a public health emergency,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office. The SEC’s complaint alleges that Parallax and Arena violated Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Bradley violated Section 17(a)(3) of the Securities Act. Without admitting or denying the SEC’s allegations, Parallax, Arena, and Bradley consented to judgments permanently enjoining them from future violations of the charged provisions and requiring them to pay penalties of $100,000, $45,000, and $40,000, respectively. Arena also agreed to be prohibited for five years from acting as a public company officer or director and from participating in an offering of penny stock. Bradley, who assisted Arena in drafting two of the misleading press releases, agreed to be prohibited for three years from participating in an offering of penny stock. The settlements are subject to court approval. The SEC’s case is being handled by Andy Palid, Sue Curtin, Rua Kelly, Al Day and Michele Perillo of the Boston Regional Office. The Commission appreciates the assistance provided by the Financial Industry Regulatory Authority and the U.S. Food and Drug Administration.