Co-Diagnostics, Inc. Class Action Lawsuit
- Company Name
- Co-Diagnostics, Inc.
- Stock Symbol
- Class Period
- February 25, 2020 to May 15, 2020
- District of Utah
The Co-Diagnostics, Inc. class action lawsuit charges Co-Diagnostics and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Co-Diagnostics securities between February 25, 2020 and May 15, 2020 (the “Class Period”). The Co-Diagnostics class action lawsuit was commenced on June 15, 2020 in the District of Utah and is captioned Gelt Trading, Ltd. v. Co-Diagnostics, Inc., No. 20-cv-00368.
According to the Co-Diagnostics class action lawsuit, due to Co-Diagnostics’ purported expertise in DNA-based testing, the world’s recent need for accurate Covid-19 testing presented Co-Diagnostics with a business opportunity. However, as the Co-Diagnostics class action lawsuit alleges, defendants made continual, knowing, and willful misstatements about their main product, a Covid-19 diagnostic test, to pump of the price of Co-Diagnostics’ stock while the officers and directors exercised low priced options and dumped their stock into the market. For example, defendants allegedly made false statements to the market regarding the accuracy of Co-Diagnostics’ Covid-19 tests, stating that the tests were 100% accurate – a claim that appeared to set Co-Diagnostics apart from its competitors.
On May 14, 2020, news outlets reported that Co-Diagnostics was reticent to participate in U.S.-based testing to verify its accuracy claims. As public reports casting doubt on Co-Diagnostics’ claims of 100% accuracy began to circulate, the stock declined, closing at $22.13 per share that day.
Later that evening, in response to other drug companies’ widely reported struggles with test accuracy, financial news services began reporting that the U.S. Food and Drug Administration (“FDA”) had announced that no Covid-19 test was 100% accurate. The FDA’s announcement undermined Co-Diagnostics’ claims about its tests’ 100% accuracy. On this news, Co-Diagnostics’ stock price fell again the following trading day – further damaging investors.
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