On June 4, 2018, investors sued MabVax Therapeutics Holdings (“MabVax” or the “Company”) in United States District Court, Southern District of California. Plaintiffs in the federal securities class action allege that they acquired MabVax stock at artificially inflated prices between March 14, 2016 and May 18, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. Here’s everything you need to know about the MabVax class action lawsuit (MBVX class action lawsuit):
Summary of the Allegations
MabVax (NASDAQ: MBVX) bills itself as “a clinical-stage biotechnology company with a fully human antibody discovery platform focused on the clinical development of products to address unmet medical needs for the treatment of cancer.”
As such, the Company works through its subsidiaries to develop human antibody-based products and vaccines. These are then used in the treatment of sarcoma and pancreatic, lung, ovarian and breast cancer.
Summary of Facts
MabVax and two of its senior officers and/or directors now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.
Specifically, they are accused of omitting truthful information about the efficacy of MabVax’s controls over financial reporting, and the calculation and reporting of beneficial share ownership from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused MabVax stock to trade at artificially inflated prices during the time in question.
The truth began to surface on January 30, 2018, when the Company filed a form with the SEC in which it disclosed it that the SEC was investigating it.
Then, on May 21, 2018, the Company filed another form with the SEC in which it disclosed additional details about the nature of the investigation. Specifically, the Company acknowledged that the agency was investigating “the Company and its officers and directors’ potential violation of federal securities laws.” The Company also acknowledged that the SEC was looking into “potential violations of securities laws by various holders of the Company’s securities.”
A closer look…
As alleged in the June 4 complaint, the MabVax repeatedly made misleading public statements during the Class Period.
For example, in an annual report filed with the SEC on March 14, 2016, the Company discussed its “Financing Activities” and the effectiveness of its financial controls. In this context it stated in relevant part: “We conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our principal executive officer and principal financial officer conclude that, at December, 31, 2015, our internal control over financial reporting was effective.”
The Company also reiterated the statement in annual reports filed with the SEC on March 1, 2017 and April 2, 2018.
Impact of the Alleged Fraud on MabVax’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is August 3, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in MabVax common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
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Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.
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