First Choice Healthcare Solutions, Inc.
- Company Name
- First Choice Healthcare Solutions, Inc.
- Stock Symbol
- Class Period
- April 1, 2014 to November 14, 2018
- Motion Deadline
- May 28, 2019
- Middle District of Florida
The complaint charges First Choice and its former Chairman, CEO and President, Christian Romandetti, Sr., with violations of the Securities Exchange Act of 1934. First Choice is a non-physician-owned healthcare services company focused on the delivery of orthopedic care and treatment.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose materially adverse information regarding First Choice’s business and prospects, including that defendants were engaged in an undisclosed pump-and-dump scheme that manipulated and artificially inflated the price of First Choice common stock to nearly $3 per share during the Class Period.
According to the complaint, beginning no later than September 2013, Mark Burnett, Jeffrey Miller and Frank Sarro, with the help of Romandetti, acquired large blocks of First Choice stock. Then Romandetti and the others engaged Elite Stock Research, Inc. (“Elite”), a boiler room company operated and controlled by Anthony Vassallo, to artificially promote, or fraudulently “pump,” the market price and trading volume of First Choice shares, paying Vassallo and Elite with cash and large blocks of First Choice securities for their services. Elite and Vassallo implemented a large-scale promotional campaign that included touting the Company when they communicated with retail investors regarding purchasing First Choice stock. Elite and Vassallo also engaged in manipulative trades designed to artificially increase the trading volume and market price of First Choice stock while their co-conspirators simultaneously dumped their shares at inflated prices as unsuspecting investors were purchasing First Choice stock.
Then on November 14, 2018, the U.S. Department of Justice (“DOJ”) filed a criminal indictment against Romandetti and his co-conspirators. The DOJ charged that, through various manipulative trading practices, Romandetti and the others defrauded investors in First Choice stock “by artificially controlling the price and volume of traded shares in [First Choice] through, inter alia: (a) artificially generating price movements and trading volume in the shares; and (b) material misrepresentations and omissions in their communications with victim investors about the stock of” First Choice. The next day, the SEC filed a civil action against Romandetti and his co-conspirators for, among other things, securities fraud in connection with their conducting a multi-million dollar pump-and-dump scheme from May 2013 through June 2016. The SEC alleged that the scheme caused at least $2.5 million in losses to “more than 100 unsuspecting retail investors,” while generating more than $3.3 million of illegal profits for the participants in the scheme, including $560,000 in kick-backs for Romandetti. On these disclosures, First Choice common stock declined $0.66 per share, or nearly 65%, to close at $0.35 per share on November 15, 2018.