SEC v. Jason C. Nielsen, No. 5:20-cv-03788, Northern District of California (June 10, 2020) — Complaint

 
 
 
 
 
 
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ERIN E. SCHNEIDER (Cal. Bar No. 216114) 
MONIQUE C. WINKLER (Cal. Bar No. 213031) 
  [email protected] 
JASON H. LEE (Cal. Bar No. 253140) 
  [email protected] 
JOHN K. HAN (Cal. Bar No. 208086) 
  [email protected]  
SUSAN F. LAMARCA (Cal. Bar No. 215231) 
  [email protected] 
FITZANN R . REID (NY Bar No. 5084751) 
  [email protected] 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
44 Montgomery Street, Suite 2800 
San Francisco, CA 94104 
(415) 705-2500 
UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF CALIFORNIA 
SAN JOSE DIVISION 
 
 
SECURITIES AND EXCHANGE COMMISSION, 
  Plaintiff, 
 v. 
JASON C. NIELSEN, 
  Defendant. 
 
Case No.  
COMPLAINT  
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:  
SUMMARY OF THE ACTION 
1. During the COVID-19 pandemic, Defendant Jason C. Nielsen defrauded other 
investors for his personal profit.  Specifically, from at least on or about March 2, 2020 to on or about 
April 13, 2020, Defendant Nielsen engaged in a “pump and dump” scheme involving the stock of 
Arrayit Corporation (“Arrayit”), a biotechnology company.  
2. Defendant Nielsen, an individual investor who owned approximately 10% of the 
common stock of Arrayit, posted numerous false and misleading statements on an internet forum that 
were designed to encourage other investors to buy Arrayit stock and, thereby, drive up the price of 

 
COMPLAINT 2  
 
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the stock.  Nielsen then sold his shares of Arrayit stock at the artificially-inflated price and reaped the 
profit. 
3. Defendant Nielsen used several types of false and misleading statements and 
omissions of material fact to “pump up” Arrayit stock, including: (A) statements that Arrayit had 
developed a COVID-19 test; that Arrayit had an Emergency Use Authorization application for the 
COVID-19 test pending with the U.S. Food and Drug Administration (FDA); and that Arrayit 
received FDA approval for its COVID-19 test; (B) statements that Nielsen purchased, or intended to 
purchase, large amounts of Arrayit stock; (C) statements that other investors purchased large amounts 
of Arrayit stock; and (D) omissions of fact that he owned a substantial financial interest in Arrayit 
stock and, despite his public promotion of the stock, that he actually intended to “dump” his Arrayit 
shares. 
4. In addition, Nielsen employed a deceptive technique, known as “spoofing,” in which 
he placed – and subsequently cancelled – large orders of Arrayit stock to give the false appearance of 
a high demand for the security.  Defendant Nielsen posted statements on an internet forum that 
falsely attributed these purported large bids and purchases of Arrayit stock to other investors. 
5. Nielsen’s deceptive promotional campaign of Arrayit stock was successful and he 
received substantial monetary gains by duping other investors. 
6. Defendant Nielsen has violated, and unless restrained and enjoined will continue to 
violate, the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange 
Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] and Section 17(a) of 
the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77(q)(a)], as well as Section 9(a)(2) of the 
Exchange Act [15 U.S.C. §§ 78i(a)(2)]. 
JURISDICTION AND VENUE 
7. The Commission brings this action pursuant to Sections 21 and 27 of the Exchange 
Act [15 U.S.C. §§ 78u and 78aa] and Sections 20 and 22 of the Securities Act [15 U.S.C. §§ 77t and 
77v].   

 
COMPLAINT 3  
 
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8. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e) and 27 of 
the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa] and Sections 20(b), 20(d) and 22(a) of the 
Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)].   
9. Defendant, directly or indirectly, made use of the means and instrumentalities of 
interstate commerce, or of the mails, or of the facilities of a national securities exchange, in 
connection with the acts, transactions, practices, and courses of business alleged in this complaint.  
10. Venue is proper in this District pursuant to Section 27(a) of the Exchange Act [15 
U.S.C. § 78aa(a)] and Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)], since acts, practices, 
and courses of business that form the basis for the violations alleged in this complaint occurred in this 
District. 
11. Under Civil Local Rule 3 -2(e), this civil action should be assigned to the San Jose 
Division, because a substantial part of the events or omissions which give rise to the claims al leged 
herein occurred in Santa Clara County. 
THE DEFENDANT 
12. Jason C. Nielsen, age 53, is a resident of Santa Cruz, California.   
OTHER RELEVANT ENTITIES 
13.  Arrayit Corporation is a biotechnology company headquartered in Sunnyvale, 
California, which purports to focus on the discovery, development, and manufacture of proprietary 
life science technologies.  Prior to the period, April 14, 2020 through April 27, 2020, when trading in 
its shares was halted by Order of the Securities and Exchange Commission, Arrayit’s common stock, 
listed as “ARYC,” was quoted on OTC Link LLC (previously “Pink Sheets”) operated by OTC 
Markets Group Inc.  Arrayit’s shares are currently trading outside of an interdealer quotation system 
or in the “grey market.”   
FACTS 
A. Defendant Nielsen 
14. Defendant Nielsen is an individual who has purchased and sold Arrayit stock.  On 
March 2, 2020, Defendant Nielsen held 114,803,532 shares of Arrayit common stock, which 
represented 10.19% of Arrayit’s total outstanding shares as of that date.  At that time, the total market 

 
COMPLAINT 4  
 
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value of Nielsen’s holdings in Arrayit was $1,998,051.26.  According to his brokerage account’s 
opening documents, no one other than Defendant Nielsen is authorized to trade in the account.   
15. During all relevant times, Defendant Nielsen used the anonymous username, 
“PennyStock Alert,” to post messages on the internet forum, Investors Hub.  Investors Hub (also 
known as: Investors Hub.com, Inc.; Ihub; and investorshub.advfn.com) self-describes itself as an 
internet forum in which investors can gather and share market insights.  
B. Defendant Nielsen’s Promotional Touts R egarding Arrayit’s Purported  
COVID-19 Test Were False and Misleading 
16. In March and April 2020, the news cycle in America was saturated with reports and 
commentary on the severity of the COVID-19 virus, the need for accurate and rapid COVID-19 tests, 
the need for increased COVID-19 testing, and the downturn in the stock market and global economy 
due to the COVID-19 pandemic. 
17. During this time, Defendant Nielsen posted numerous messages on Investors Hub that 
promoted Arrayit stock claiming that Arrayit had a COVID-19 test; that Arrayit’s COVID-19 test 
was pending Emergency Use Authorization from the FDA; and that Arrayit had received approval for 
its COVID-19 test.  Examples of such posts include the following: 
 
Date Time Post 
03/11/2020 
  
  
8:55 AM Opportunity is now  
Added more yesterday   
7:08 PM LabCorp does not have a Coronavirus test 
Arrayit has a CoronaVirus test 
7:51 PM Just trying to keep the facts straight here. Arrayit has 
a COVID 19 test .... other labs are working 
frenetically to create what ARYC already has 
03/13/2020 12:53 PM They are there seven days a week. I have seen 
them on Saturdays and Sundays most weekends. 
03/14/2020 1:00 PM ******* “Arrayit SARS-CoV-2 test is submitted and 
pending emergency approval” ******* 
Brutal for everyone who missed out on the .01’s and 
.02’s 
Looks like I will be adding in the .03’s and higher 
this week and I am fine with it  
5:45 PM Thank goodness for undiscovered gems like ARYC. 
Global pandemic CoronaVirus will require more than 
2 labs and that’s why Arrayit’s COVID 19 Test is 
being fast tracked for approval..... 
See you bright and early on Monday, I’ve got a bid in 
at .03 just to make sure it gets filled 

 
COMPLAINT 5  
 
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Date Time Post 
03/15/2020 10:24 AM Thank you. I have visited Arrayit on several 
occasions, received  
confirmation of the Arrayit CoronaVirus test  
submission via email, and would give ARYC a Fin of  
10+ without hesitation 
03/16/2020 
  
  
  
  
  
  
  
  
8:28 AM The market is looking for another halt. Where should 
investors go? 
How about a company that has developed a 
CoronaVirus Test?? 
Arrayit! 
10:26 AM Looks thin to .05 
10:30 AM I added 98,000 today. 
11:06 AM Apparently some sold their shares too early. ....029’s 
up! 
12:25 PM Added 98,000 shares today.  I expect to hear an 
update after hours today or tomorrow.  
03/18/2020 
  
9:50 AM After hours news that hasn’t even hit the general 
market. Buy before it does  
 
http://www.arrayit.com/SARS-CoV-2COVID-
19TestInstructions.pdf 
10:31 AM I’m on the phone with my Broker trying to transfer 
money into my account before tomorrow 
03/20/2020 10:08 AM ARRAYIT [OTC: $ARYC] CoronaVirus Test 
Approved!! 
03/22/2020 10:10 AM ARRAYIT [OTC: $ARYC ] CoronaVirus Test 
Approved!! 
 
http://www.arrayit.com/SARS-CoV-2COVID-
19TestInstructions.pdf 
 
Order the COVID-19 Test now!  
 
[email protected] 
03/23/2020 12:02 AM ARRAYIT CoronaVirus Test Approved 
03/29/2020 12:09 AM ARRAYIT CoronaVirus Test Approved!! 
 
http://www.arrayit.com/SARS-CoV-2COVID-
19TestInstructions.pdf 
04/05/2020 2:47 PM Arrayit’s CoronaVirus Test is FDA approved: 
 
https://vimeo.com/400954846 
04/09/2020 10:18 AM Arrayit’s CoronaVirus test is EUA approved for 
home use! 
 
https://reviveaz.com/covid-19-testing 
18. Defendant Nielsen made the statements regarding a purported Arrayit COVID-19 test 
to generate interest in Arrayit stock.  Defendant Nielsen’s use of these posts was deceptive and 
misleading because, as he promoted Arrayit stock to the investing public, he knew, or was reckless in 

 
COMPLAINT 6  
 
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not knowing, that he failed to disclose the extent of his financial stake in the security and the fact that 
he was actively selling off his shares. 
19. As discussed in more detail below, Defendant Nielsen’s trading records reveal that he 
was dumping his shares close in time to when he was posting messages touting Arrayit’s stock. 
20. Moreover, Defendant Nielsen’s statements that Arrayit’s COVID-19 test was pending 
Emergency Use Authorization and that the test was “approved” were false.  Arrayit did not submit an 
application for Emergency Use Authorization to the FDA until on or about April 13, 2020.  
Accordingly, Defendant Nielsen’s statements regarding Arrayit’s pending application were false at 
the time they were made (before on or about April 13, 2020).   In addition, as of the filing of this 
Complaint, Arrayit did not have a COVID-19 test that was approved by the FDA or any other entity.  
With respect to his statements about Arrayit having an “approved” COVID-19 test, Defendant 
Nielsen either knew, or was reckless in not knowing, that these statements were false and misleading. 
C. Defendant Nielsen’s Promotional Touts Regarding his Purchases of Arrayit 
Stock Were False and Misleading  
21. Defendant Nielsen also posted numerous messages on Investors Hub touting his 
purchases, or intent to purchase, Arrayit stock, in an effort to entice other investors to do the same.  
However, unbeknownst to the other investors, Defendant Nielsen quietly sold the stock when its 
share price increased. 
22.   For example, from on or about March 2, 2020, through on or about March 4, 2020, 
Defendant Nielsen’s public statements on Investors Hub included the following: 
 
Date Time Post 
03/02/2020 2:32 PM My ARYC shares are locked up tight. Willing to wait 
   no problem   . 
3:46 PM Keep hitting the ARYC ask     It’s not 
dropping    No one is selling      
4:02 PM Another dark GREEN day! Glad I’m adding! 
03/03/2020 11:01 AM Fake wall by someone who is still trying to buy 
under .2 HIT IT!!!!!! 
8:48 PM Happy to be adding. Picked up another 44k shares 
today !! 
03/04/2020 12:39 PM I added yesterday and I am adding today. 
CEARYCform15 

 
COMPLAINT 7  
 
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23. Despite publically promoting the purchase of Arrayit stock, Defendant Nielsen’s 
trading records during this time reveal that the net effect of his trading activity was that he was 
aggressively selling his shares of Arrayit stock.   From on or about March 2, 2020 through on or 
about March 4, 2020, Defendant Nielsen executed only 2 purchase orders for 35,000 shares of 
Arrayit stock, but he executed 20 transactions selling 953,364 shares of Arrayit stock, at an average 
price of $0.021.   
24. Defendant Nielsen’s statements are false and misleading because he knew, or was 
reckless in not knowing, that he failed to disclose material facts, including his substantial financial 
interest in the stock and the fact that he was planning to sell his shares of Arrayit at the same time that 
he was recommending buying it to others.   
25. As another example, Defendant Nielsen used the same “pump and dump” strategy 
from on or about March 17, 2020 through on or about March 26, 2020.  His public promotional 
messages during this time included the following: 
 
Date Time Post 
03/17/2020 11:46 AM It’s much easier to buy ARYC, sit and hold, 
watch share price move up, than to relentlessly 
and without basis attack the company 
I’m buying 
4:39 PM Where will my $1,000 check be going? More 
ARYC shares !! 
President Donald Trump wants the government 
to 
send checks to Americans in the next two weeks 
in 
an effort to curb the economic cost of the 
coronavirus outbreak, Treasury Secretary Steven 
Mnuchin said Tuesday. 
“The president has instructed me we have to do 
this 
now,” he said at the White House briefing. 
03/18/2020 11:48 AM .03’s getting bought up 
Great news still hasn’t hit the general 
marketplace. Buying before it does. 
 
03/23/2020 9:53 AM I’m a buyer at this level 
 
26. Once again, despite claiming to other investors that he was eager to purchase Arrayit 
stock, the net effect of his trading activity shows that he was aggressively selling his shares.  From on 

 
COMPLAINT 8  
 
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or about March 17, 2020 through on or about March 26, 2020, Defendant Nielsen executed only 1 
purchase order for 5000 shares of Arrayit stock, but he executed approximately 90 transactions 
selling 2,620,080 shares of Arrayit stock, at an average price of $0.029.   
27. Defendant Nielsen’s statements are false and misleading because he knew, or was 
reckless in not knowing, that he failed to disclose material facts, including his substantial financial 
interest in the stock and the fact that he was planning to sell his shares of Arrayit at the same time that 
he was recommending buying it to others.   
28. Overall, between on or about March 2, 2020 and on or about April 13, 2020, 
Defendant Nielsen posted several hundred false and misleading messages on Investors Hub claiming 
that he bought, or intended to buy, Arrayit stock when, in fact, the net effect of his trading activity 
was that he aggressively sold those securities.  During this time period, Defendant Nielsen executed 
only 36 transactions purchasing 2,478,484 shares of Arrayit stock, but he executed 193 transactions 
selling 6,674,786 shares of Arrayit stock. 
D. Defendant Nielsen Engaged in “Spoofing” to “Pump the Market” 
29. During his promotional campaign, Defendant Nielsen placed large orders for Arrayit 
stock, subsequently cancelled the orders before they were filled, and then posted messages on 
Investors Hub falsely attributing these large orders to someone else (often a fictitious investor).  This 
practice, known as “spoofing,” was intended to create the false impression of a high demand for the 
securities.  For example: 
30. On March 4, 2020, between 9:19 a.m. and 9:55 a.m., Defendant Nielsen placed—and 
subsequently cancelled—three orders to purchase a total of three million shares of Arrayit securities.  
At 10:08 a.m., he posted on Investors Hub: “Enter...the ARYC [Arrayit] Whales.”  At 10:09 a.m., he 
posted: “Who just bought 3 million shares of ARYC???!!!!?????!!!!!????.”  In fact, there was no 
purchase of three million shares of Arrayit securities on March 4, 2020. 
31. On March 24, 2020, between 9:19 a.m. and 11:47 a .m., Defendant Nielsen placed—
and subsequently cancelled—3 bids for a total of 2.6 million shares.  At 11:49 a.m., he posted on 
Investors Hub: “Two point five million share Bid!!”  At 11:50 a.m., he further posted: “Iconic on the 
Bid with 2.5 million?????”  (Iconic Holdings LLC is one of ARYC’s creditors). 

 
COMPLAINT 9  
 
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32. On March 27, 2020, at 3:40 p.m., Defendant Nielsen placed—and subsequently 
cancelled—one order to purchase two million shares of Arrayit securities.  At 3:41 p.m., he posted on 
Investors Hub: “Oh boy, lol...2 million share bid.” 
33. On April 7, 2020, at 11:32 a.m., Nielsen placed—and subsequently canceled—one 
order to purchase two million shares of Arrayit securities.  At 12:16 p.m., he posted on Investors 
Hub: “Oh look!! A 2 million share Bid!!” 
34. From on or about March 1, 2020 through on or about April 13, 2020, Defendant 
Nielsen placed—and subsequently canceled— 64 orders for a total of 56,950,400 shares of Arrayit 
securities.  In numerous instances, Defendant Nielsen posted about a corresponding anonymous 
bidder or “whale” in the market who supposedly placed the buy orders at issue.  
35. Defendant Nielsen’s statements about these large bids and purchases of Arrayit stock 
by other investors were false and misleading because he, surreptitiously,  was the one who placed the 
purchase orders and subsequently cancelled them. 
36. These statements were also false and misleading because, when making posts 
encouraging other investors to purchase shares of Arrayit stock, Defendant Nielsen knew, or was 
reckless in not knowing, that he failed to disclose his substantial financial interest in the stock and 
that he was planning to sell his shares of Arrayit. 
E. Defendant Nielsen Profited through his “Pump and Dump” Scheme 
37. Between on or about March 2, 2020 and on or about April 13, 2020, as a result of 
Defendant Nielsen’s “pump and dump” strategy with Arrayit stock, he realized a profit of 
approximately $137,000. 
38. On April 13, 2020, the Commission temporarily suspended trading in Arrayit stock, 
for the period April 14, 2020 through April 27, 2020, due to “questions regarding the accuracy and 
adequacy of publicly-available information concerning Arrayit Corporation, including: (a) its 
financial condition and its operations, if any, in light of the absence of any public disclosure by the 
Company since 2015, and (b) information in the marketplace since at least March 2, 2020, claiming 
the Company developed an approved COVID-19 blood test.” 
 

 
COMPLAINT 10  
 
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FIRST CLAIM FOR RELIEF 
 (Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder) 
39. Paragraph numbers 1 through 38 are re-alleged and incorporated herein by reference. 
40. Defendant Nielsen, by engaging in the conduct set forth above, directly or indirectly, 
by use of means or instrumentalities of interstate commerce, or of the mails, or of a facility of a 
national security exchange, with scienter:  (a) employed devices, schemes, or artifices to defraud; (b) 
made untrue statements of material fact or omitted to state material facts necessary in order to make 
the statements made, in light of the circumstances under which they were made, not misleading; and 
(c) engaged in acts, practices, or courses of business which operated or would operate as a fraud or 
deceit upon other persons, in connection with the purchase or sale of securities, in violation of 
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 
240.10b-5], and unless restrained and enjoined will continue to violate these provisions. 
SECOND CLAIM FOR RELIEF 
(Violations of Section 9(a)(2) of the Exchange Act) 
41. Paragraph numbers 1 through 38 are re-alleged and incorporated herein by reference. 
42. Defendant Nielsen, by engaging in the conduct set forth above, directly or indirectly, 
by the use of means or instrumentalities of interstate commerce, or of the mails, or of the facilities of 
a national securities exchange, effected a series of transactions in Arrayit stock that created actual or 
apparent active trading in the stock, and raised the price of the stock, for the purpose of inducing the 
purchase or sale of such security by others, in violation of Section 9(a)(2) of the Exchange Act [15 
U.S.C. § 78(i)(a)(2)], and unless restrained and enjoined will continue to violate this provision. 
THIRD CLAIM FOR RELIEF 
(Violations of Section 17(a) of the Securities Act) 
43. Paragraph numbers 1 through 38 are re-alleged and incorporated herein by reference. 
44. Defendant Nielsen, by engaging in the conduct set forth above, directly or indirectly, 
by use of means or instruments of transportation or communication in interstate commerce, or of the 
mails:  (a) with scienter, employed devices, schemes, or artifices to defraud; (b) made untrue 
statements of material fact or omitted to state material facts necessary in order to make the statements 

 
COMPLAINT 11  
 
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made, in light of the circumstances under which they were made, not misleading; and (c) engaged in 
transactions, practices, or courses of business which operated or would operate as a fraud or deceit 
upon other purchasers, in the offer or sale of securities, in violation of Section 17(a) of the Securities 
Act [15 U.S.C. § 77(q)(a)], and unless restrained and enjoined will continue to violate these 
provisions. 
PRAYER FOR RELIEF 
WHEREFORE, the Commission respectfully requests that the Court: 
I. 
Enjoin Defendant Nielsen from directly or indirectly violating Sections 9(a)(2) and 10(b) of 
the Exchange Act [15 U.S.C. §§ 76i(a)(2), 78j(b)], Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-
5], and Section 17(a) of the Securities Act [15 U.S.C. § 77(q)(a)]. 
II.  
Enter an Order requiring Defendant Nielsen to disgorge ill-gotten gains according to proof, 
plus prejudgment interest thereon. 
III. 
Enter an Order requiring Defendant Nielsen to pay civil money penalties pursuant to Section 
21(d) of the Exchange Act [15 U.S.C. § 78u(d)] and Section 20(d) of the Securities Act [15 U.S.C. § 
77t(d)]. 
IV. 
 Enter an Order barring Defendant Nielsen from participating in any offering of a penny stock 
pursuant to Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] and Section 20(g) of the 
Securities Act [15 U.S.C. § 77t(g)]. 
V. 
Retain jurisdiction of this action in accordance with the principles of equity and the Federal 
Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that 
may be entered, or to entertain any suitable application or motion for additional relief within the 
jurisdiction of this Court. 
  

 
COMPLAINT 12  
 
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VI. 
Grant such other and further relief as this Court may determine to be just, equitable, and 
necessary. 
 
 
Dated:  June 9, 2020    Respectfully submitted, 
 
      ___________________________   
      FITZANN R. REID  
Attorney for Plaintiff 
SECURITIES AND EXCHANGE  
COMMISSION 

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ERIN E. SCHNEIDER (Cal. Bar No. 216114) 
MONIQUE C. WINKLER (Cal. Bar No. 213031) 
  [email protected] 
JASON H. LEE (Cal. Bar No. 253140) 
  [email protected] 
JOHN K. HAN (Cal. Bar No. 208086) 
  [email protected]  
SUSAN F. LAMARCA (Cal. Bar No. 215231) 
  [email protected] 
FITZANN R. REID (NY Bar No. 5084751) 
  [email protected] 

Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
44 Montgomery Street, Suite 2800 
San Francisco, CA 94104 
(415) 705-2500 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 
 
 
SECURITIES AND EXCHANGE COMMISSION, 

  Plaintiff, 

 v. 

JASON C. NIELSEN, 

  Defendant. 
 

Case No.  

COMPLAINT  

Plaintiff Securities and Exchange Commission (the “Commission”) alleges:  

SUMMARY OF THE ACTION 

1. During the COVID-19 pandemic, Defendant Jason C. Nielsen defrauded other 

investors for his personal profit.  Specifically, from at least on or about March 2, 2020 to on or about 

April 13, 2020, Defendant Nielsen engaged in a “pump and dump” scheme involving the stock of 

Arrayit Corporation (“Arrayit”), a biotechnology company.  

2. Defendant Nielsen, an individual investor who owned approximately 10% of the 

common stock of Arrayit, posted numerous false and misleading statements on an internet forum that 

were designed to encourage other investors to buy Arrayit stock and, thereby, drive up the price of 



 

COMPLAINT 2  
 

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the stock.  Nielsen then sold his shares of Arrayit stock at the artificially-inflated price and reaped the 

profit. 

3. Defendant Nielsen used several types of false and misleading statements and 

omissions of material fact to “pump up” Arrayit stock, including: (A) statements that Arrayit had 

developed a COVID-19 test; that Arrayit had an Emergency Use Authorization application for the 

COVID-19 test pending with the U.S. Food and Drug Administration (FDA); and that Arrayit 

received FDA approval for its COVID-19 test; (B) statements that Nielsen purchased, or intended to 

purchase, large amounts of Arrayit stock; (C) statements that other investors purchased large amounts 

of Arrayit stock; and (D) omissions of fact that he owned a substantial financial interest in Arrayit 

stock and, despite his public promotion of the stock, that he actually intended to “dump” his Arrayit 

shares. 

4. In addition, Nielsen employed a deceptive technique, known as “spoofing,” in which 

he placed – and subsequently cancelled – large orders of Arrayit stock to give the false appearance of 

a high demand for the security.  Defendant Nielsen posted statements on an internet forum that 

falsely attributed these purported large bids and purchases of Arrayit stock to other investors. 

5. Nielsen’s deceptive promotional campaign of Arrayit stock was successful and he 

received substantial monetary gains by duping other investors. 

6. Defendant Nielsen has violated, and unless restrained and enjoined will continue to 

violate, the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange 

Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] and Section 17(a) of 

the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77(q)(a)], as well as Section 9(a)(2) of the 

Exchange Act [15 U.S.C. §§ 78i(a)(2)]. 

JURISDICTION AND VENUE 

7. The Commission brings this action pursuant to Sections 21 and 27 of the Exchange 

Act [15 U.S.C. §§ 78u and 78aa] and Sections 20 and 22 of the Securities Act [15 U.S.C. §§ 77t and 

77v].   



 

COMPLAINT 3  
 

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8. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e) and 27 of 

the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa] and Sections 20(b), 20(d) and 22(a) of the 

Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)].   

9. Defendant, directly or indirectly, made use of the means and instrumentalities of 

interstate commerce, or of the mails, or of the facilities of a national securities exchange, in 

connection with the acts, transactions, practices, and courses of business alleged in this complaint.  

10. Venue is proper in this District pursuant to Section 27(a) of the Exchange Act [15 

U.S.C. § 78aa(a)] and Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)], since acts, practices, 

and courses of business that form the basis for the violations alleged in this complaint occurred in this 

District. 

11. Under Civil Local Rule 3-2(e), this civil action should be assigned to the San Jose 

Division, because a substantial part of the events or omissions which give rise to the claims alleged 

herein occurred in Santa Clara County. 

THE DEFENDANT 

12. Jason C. Nielsen, age 53, is a resident of Santa Cruz, California.   

OTHER RELEVANT ENTITIES 

13.  Arrayit Corporation is a biotechnology company headquartered in Sunnyvale, 

California, which purports to focus on the discovery, development, and manufacture of proprietary 

life science technologies.  Prior to the period, April 14, 2020 through April 27, 2020, when trading in 

its shares was halted by Order of the Securities and Exchange Commission, Arrayit’s common stock, 

listed as “ARYC,” was quoted on OTC Link LLC (previously “Pink Sheets”) operated by OTC 

Markets Group Inc.  Arrayit’s shares are currently trading outside of an interdealer quotation system 

or in the “grey market.”   

FACTS 

A. Defendant Nielsen 

14. Defendant Nielsen is an individual who has purchased and sold Arrayit stock.  On 

March 2, 2020, Defendant Nielsen held 114,803,532 shares of Arrayit common stock, which 

represented 10.19% of Arrayit’s total outstanding shares as of that date.  At that time, the total market 



 

COMPLAINT 4  
 

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value of Nielsen’s holdings in Arrayit was $1,998,051.26.  According to his brokerage account’s 

opening documents, no one other than Defendant Nielsen is authorized to trade in the account.   

15. During all relevant times, Defendant Nielsen used the anonymous username, 

“PennyStock Alert,” to post messages on the internet forum, Investors Hub.  Investors Hub (also 

known as: Investors Hub.com, Inc.; Ihub; and investorshub.advfn.com) self-describes itself as an 

internet forum in which investors can gather and share market insights.  

B. Defendant Nielsen’s Promotional Touts Regarding Arrayit’s Purported  

COVID-19 Test Were False and Misleading 

16. In March and April 2020, the news cycle in America was saturated with reports and 

commentary on the severity of the COVID-19 virus, the need for accurate and rapid COVID-19 tests, 

the need for increased COVID-19 testing, and the downturn in the stock market and global economy 

due to the COVID-19 pandemic. 

17. During this time, Defendant Nielsen posted numerous messages on Investors Hub that 

promoted Arrayit stock claiming that Arrayit had a COVID-19 test; that Arrayit’s COVID-19 test 

was pending Emergency Use Authorization from the FDA; and that Arrayit had received approval for 

its COVID-19 test.  Examples of such posts include the following: 

 
Date Time Post 
03/11/2020 
  
  

8:55 AM Opportunity is now  
Added more yesterday   

7:08 PM LabCorp does not have a Coronavirus test 
Arrayit has a CoronaVirus test 

7:51 PM Just trying to keep the facts straight here. Arrayit has 
a COVID 19 test .... other labs are working 
frenetically to create what ARYC already has 

03/13/2020 12:53 PM They are there seven days a week. I have seen 
them on Saturdays and Sundays most weekends. 

03/14/2020 1:00 PM ******* “Arrayit SARS-CoV-2 test is submitted and 
pending emergency approval” ******* 
Brutal for everyone who missed out on the .01’s and 
.02’s 
Looks like I will be adding in the .03’s and higher 
this week and I am fine with it  

5:45 PM Thank goodness for undiscovered gems like ARYC. 
Global pandemic CoronaVirus will require more than 
2 labs and that’s why Arrayit’s COVID 19 Test is 
being fast tracked for approval..... 
See you bright and early on Monday, I’ve got a bid in 
at .03 just to make sure it gets filled 



 

COMPLAINT 5  
 

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Date Time Post 
03/15/2020 10:24 AM Thank you. I have visited Arrayit on several 

occasions, received  
confirmation of the Arrayit CoronaVirus test  
submission via email, and would give ARYC a Fin of  
10+ without hesitation 

03/16/2020 
  
  
  
  
  
  
  
  

8:28 AM The market is looking for another halt. Where should 
investors go? 
How about a company that has developed a 
CoronaVirus Test?? 
Arrayit! 

10:26 AM Looks thin to .05 
10:30 AM I added 98,000 today. 
11:06 AM Apparently some sold their shares too early. .…029’s 

up! 
12:25 PM Added 98,000 shares today.  I expect to hear an 

update after hours today or tomorrow.  
03/18/2020 
  

9:50 AM After hours news that hasn’t even hit the general 
market. Buy before it does  
 
http://www.arrayit.com/SARS-CoV-2COVID-
19TestInstructions.pdf 

10:31 AM I’m on the phone with my Broker trying to transfer 
money into my account before tomorrow 

03/20/2020 10:08 AM ARRAYIT [OTC: $ARYC] CoronaVirus Test 
Approved!! 

03/22/2020 10:10 AM ARRAYIT [OTC: $ARYC ] CoronaVirus Test 
Approved!! 
 
http://www.arrayit.com/SARS-CoV-2COVID-
19TestInstructions.pdf 
 
Order the COVID-19 Test now!  
 
[email protected] 

03/23/2020 12:02 AM ARRAYIT CoronaVirus Test Approved 
03/29/2020 12:09 AM ARRAYIT CoronaVirus Test Approved!! 

 
http://www.arrayit.com/SARS-CoV-2COVID-
19TestInstructions.pdf 

04/05/2020 2:47 PM Arrayit’s CoronaVirus Test is FDA approved: 
 
https://vimeo.com/400954846 

04/09/2020 10:18 AM Arrayit’s CoronaVirus test is EUA approved for 
home use! 
 
https://reviveaz.com/covid-19-testing 

18. Defendant Nielsen made the statements regarding a purported Arrayit COVID-19 test 

to generate interest in Arrayit stock.  Defendant Nielsen’s use of these posts was deceptive and 

misleading because, as he promoted Arrayit stock to the investing public, he knew, or was reckless in 



 

COMPLAINT 6  
 

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not knowing, that he failed to disclose the extent of his financial stake in the security and the fact that 

he was actively selling off his shares. 

19. As discussed in more detail below, Defendant Nielsen’s trading records reveal that he 

was dumping his shares close in time to when he was posting messages touting Arrayit’s stock. 

20. Moreover, Defendant Nielsen’s statements that Arrayit’s COVID-19 test was pending 

Emergency Use Authorization and that the test was “approved” were false.  Arrayit did not submit an 

application for Emergency Use Authorization to the FDA until on or about April 13, 2020.  

Accordingly, Defendant Nielsen’s statements regarding Arrayit’s pending application were false at 

the time they were made (before on or about April 13, 2020).   In addition, as of the filing of this 

Complaint, Arrayit did not have a COVID-19 test that was approved by the FDA or any other entity.  

With respect to his statements about Arrayit having an “approved” COVID-19 test, Defendant 

Nielsen either knew, or was reckless in not knowing, that these statements were false and misleading. 

C. Defendant Nielsen’s Promotional Touts Regarding his Purchases of Arrayit 

Stock Were False and Misleading  

21. Defendant Nielsen also posted numerous messages on Investors Hub touting his 

purchases, or intent to purchase, Arrayit stock, in an effort to entice other investors to do the same.  

However, unbeknownst to the other investors, Defendant Nielsen quietly sold the stock when its 

share price increased. 

22.   For example, from on or about March 2, 2020, through on or about March 4, 2020, 

Defendant Nielsen’s public statements on Investors Hub included the following: 

 
Date Time Post 
03/02/2020 2:32 PM My ARYC shares are locked up tight. Willing to wait 

   no problem   . 
3:46 PM Keep hitting the ARYC ask     It’s not 

dropping    No one is selling      
4:02 PM Another dark GREEN day! Glad I’m adding! 

03/03/2020 11:01 AM Fake wall by someone who is still trying to buy 
under .2 HIT IT!!!!!! 

8:48 PM Happy to be adding. Picked up another 44k shares 
today !! 

03/04/2020 12:39 PM I added yesterday and I am adding today. 
CEARYCform15 



 

COMPLAINT 7  
 

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23. Despite publically promoting the purchase of Arrayit stock, Defendant Nielsen’s 

trading records during this time reveal that the net effect of his trading activity was that he was 

aggressively selling his shares of Arrayit stock.   From on or about March 2, 2020 through on or 

about March 4, 2020, Defendant Nielsen executed only 2 purchase orders for 35,000 shares of 

Arrayit stock, but he executed 20 transactions selling 953,364 shares of Arrayit stock, at an average 

price of $0.021.   

24. Defendant Nielsen’s statements are false and misleading because he knew, or was 

reckless in not knowing, that he failed to disclose material facts, including his substantial financial 

interest in the stock and the fact that he was planning to sell his shares of Arrayit at the same time that 

he was recommending buying it to others.   

25. As another example, Defendant Nielsen used the same “pump and dump” strategy 

from on or about March 17, 2020 through on or about March 26, 2020.  His public promotional 

messages during this time included the following: 

 
Date Time Post 
03/17/2020 11:46 AM It’s much easier to buy ARYC, sit and hold, 

watch share price move up, than to relentlessly 
and without basis attack the company 
I’m buying 

4:39 PM Where will my $1,000 check be going? More 
ARYC shares !! 
President Donald Trump wants the government 
to 
send checks to Americans in the next two weeks 
in 
an effort to curb the economic cost of the 
coronavirus outbreak, Treasury Secretary Steven 
Mnuchin said Tuesday. 
“The president has instructed me we have to do 
this 
now,” he said at the White House briefing. 

03/18/2020 11:48 AM .03’s getting bought up 
Great news still hasn’t hit the general 
marketplace. Buying before it does. 
 

03/23/2020 9:53 AM I’m a buyer at this level 

 

26. Once again, despite claiming to other investors that he was eager to purchase Arrayit 

stock, the net effect of his trading activity shows that he was aggressively selling his shares.  From on 



 

COMPLAINT 8  
 

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or about March 17, 2020 through on or about March 26, 2020, Defendant Nielsen executed only 1 

purchase order for 5000 shares of Arrayit stock, but he executed approximately 90 transactions 

selling 2,620,080 shares of Arrayit stock, at an average price of $0.029.   

27. Defendant Nielsen’s statements are false and misleading because he knew, or was 

reckless in not knowing, that he failed to disclose material facts, including his substantial financial 

interest in the stock and the fact that he was planning to sell his shares of Arrayit at the same time that 

he was recommending buying it to others.   

28. Overall, between on or about March 2, 2020 and on or about April 13, 2020, 

Defendant Nielsen posted several hundred false and misleading messages on Investors Hub claiming 

that he bought, or intended to buy, Arrayit stock when, in fact, the net effect of his trading activity 

was that he aggressively sold those securities.  During this time period, Defendant Nielsen executed 

only 36 transactions purchasing 2,478,484 shares of Arrayit stock, but he executed 193 transactions 

selling 6,674,786 shares of Arrayit stock. 

D. Defendant Nielsen Engaged in “Spoofing” to “Pump the Market” 

29. During his promotional campaign, Defendant Nielsen placed large orders for Arrayit 

stock, subsequently cancelled the orders before they were filled, and then posted messages on 

Investors Hub falsely attributing these large orders to someone else (often a fictitious investor).  This 

practice, known as “spoofing,” was intended to create the false impression of a high demand for the 

securities.  For example: 

30. On March 4, 2020, between 9:19 a.m. and 9:55 a.m., Defendant Nielsen placed—and 

subsequently cancelled—three orders to purchase a total of three million shares of Arrayit securities.  

At 10:08 a.m., he posted on Investors Hub: “Enter…the ARYC [Arrayit] Whales.”  At 10:09 a.m., he 

posted: “Who just bought 3 million shares of ARYC???!!!!?????!!!!!????.”  In fact, there was no 

purchase of three million shares of Arrayit securities on March 4, 2020. 

31. On March 24, 2020, between 9:19 a.m. and 11:47 a.m., Defendant Nielsen placed—

and subsequently cancelled—3 bids for a total of 2.6 million shares.  At 11:49 a.m., he posted on 

Investors Hub: “Two point five million share Bid!!”  At 11:50 a.m., he further posted: “Iconic on the 

Bid with 2.5 million?????”  (Iconic Holdings LLC is one of ARYC’s creditors). 



 

COMPLAINT 9  
 

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32. On March 27, 2020, at 3:40 p.m., Defendant Nielsen placed—and subsequently 

cancelled—one order to purchase two million shares of Arrayit securities.  At 3:41 p.m., he posted on 

Investors Hub: “Oh boy, lol…2 million share bid.” 

33. On April 7, 2020, at 11:32 a.m., Nielsen placed—and subsequently canceled—one 

order to purchase two million shares of Arrayit securities.  At 12:16 p.m., he posted on Investors 

Hub: “Oh look!! A 2 million share Bid!!” 

34. From on or about March 1, 2020 through on or about April 13, 2020, Defendant 

Nielsen placed—and subsequently canceled— 64 orders for a total of 56,950,400 shares of Arrayit 

securities.  In numerous instances, Defendant Nielsen posted about a corresponding anonymous 

bidder or “whale” in the market who supposedly placed the buy orders at issue.  

35. Defendant Nielsen’s statements about these large bids and purchases of Arrayit stock 

by other investors were false and misleading because he, surreptitiously, was the one who placed the 

purchase orders and subsequently cancelled them. 

36. These statements were also false and misleading because, when making posts 

encouraging other investors to purchase shares of Arrayit stock, Defendant Nielsen knew, or was 

reckless in not knowing, that he failed to disclose his substantial financial interest in the stock and 

that he was planning to sell his shares of Arrayit. 

E. Defendant Nielsen Profited through his “Pump and Dump” Scheme 

37. Between on or about March 2, 2020 and on or about April 13, 2020, as a result of 

Defendant Nielsen’s “pump and dump” strategy with Arrayit stock, he realized a profit of 

approximately $137,000. 

38. On April 13, 2020, the Commission temporarily suspended trading in Arrayit stock, 

for the period April 14, 2020 through April 27, 2020, due to “questions regarding the accuracy and 

adequacy of publicly-available information concerning Arrayit Corporation, including: (a) its 

financial condition and its operations, if any, in light of the absence of any public disclosure by the 

Company since 2015, and (b) information in the marketplace since at least March 2, 2020, claiming 

the Company developed an approved COVID-19 blood test.” 

 



 

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FIRST CLAIM FOR RELIEF 

 (Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder) 

39. Paragraph numbers 1 through 38 are re-alleged and incorporated herein by reference. 

40. Defendant Nielsen, by engaging in the conduct set forth above, directly or indirectly, 

by use of means or instrumentalities of interstate commerce, or of the mails, or of a facility of a 

national security exchange, with scienter:  (a) employed devices, schemes, or artifices to defraud; (b) 

made untrue statements of material fact or omitted to state material facts necessary in order to make 

the statements made, in light of the circumstances under which they were made, not misleading; and 

(c) engaged in acts, practices, or courses of business which operated or would operate as a fraud or 

deceit upon other persons, in connection with the purchase or sale of securities, in violation of 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5], and unless restrained and enjoined will continue to violate these provisions. 

SECOND CLAIM FOR RELIEF 

(Violations of Section 9(a)(2) of the Exchange Act) 

41. Paragraph numbers 1 through 38 are re-alleged and incorporated herein by reference. 

42. Defendant Nielsen, by engaging in the conduct set forth above, directly or indirectly, 

by the use of means or instrumentalities of interstate commerce, or of the mails, or of the facilities of 

a national securities exchange, effected a series of transactions in Arrayit stock that created actual or 

apparent active trading in the stock, and raised the price of the stock, for the purpose of inducing the 

purchase or sale of such security by others, in violation of Section 9(a)(2) of the Exchange Act [15 

U.S.C. § 78(i)(a)(2)], and unless restrained and enjoined will continue to violate this provision. 

THIRD CLAIM FOR RELIEF 

(Violations of Section 17(a) of the Securities Act) 

43. Paragraph numbers 1 through 38 are re-alleged and incorporated herein by reference. 

44. Defendant Nielsen, by engaging in the conduct set forth above, directly or indirectly, 

by use of means or instruments of transportation or communication in interstate commerce, or of the 

mails:  (a) with scienter, employed devices, schemes, or artifices to defraud; (b) made untrue 

statements of material fact or omitted to state material facts necessary in order to make the statements 



 

COMPLAINT 11  
 

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made, in light of the circumstances under which they were made, not misleading; and (c) engaged in 

transactions, practices, or courses of business which operated or would operate as a fraud or deceit 

upon other purchasers, in the offer or sale of securities, in violation of Section 17(a) of the Securities 

Act [15 U.S.C. § 77(q)(a)], and unless restrained and enjoined will continue to violate these 

provisions. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court: 

I. 

Enjoin Defendant Nielsen from directly or indirectly violating Sections 9(a)(2) and 10(b) of 

the Exchange Act [15 U.S.C. §§ 76i(a)(2), 78j(b)], Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-

5], and Section 17(a) of the Securities Act [15 U.S.C. § 77(q)(a)]. 

II. 

Enter an Order requiring Defendant Nielsen to disgorge ill-gotten gains according to proof, 

plus prejudgment interest thereon. 

III. 

Enter an Order requiring Defendant Nielsen to pay civil money penalties pursuant to Section 

21(d) of the Exchange Act [15 U.S.C. § 78u(d)] and Section 20(d) of the Securities Act [15 U.S.C. § 

77t(d)]. 

IV. 

 Enter an Order barring Defendant Nielsen from participating in any offering of a penny stock 

pursuant to Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] and Section 20(g) of the 

Securities Act [15 U.S.C. § 77t(g)]. 

V. 

Retain jurisdiction of this action in accordance with the principles of equity and the Federal 

Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that 

may be entered, or to entertain any suitable application or motion for additional relief within the 

jurisdiction of this Court. 

  



 

COMPLAINT 12  
 

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VI. 

Grant such other and further relief as this Court may determine to be just, equitable, and 

necessary. 

 

 

Dated:  June 9, 2020    Respectfully submitted, 

 
      ___________________________   
      FITZANN R. REID  

Attorney for Plaintiff 
SECURITIES AND EXCHANGE  
COMMISSION 


		2020-06-09T12:03:50-0700
	FITZANN REID