Involved fees earner: Jonathan Hale Friedman – Foley & Lardner LLP Brian Calandra – Pomerantz LLP Jeremy Lieberman – Pomerantz LLP The Foley & Lardner team assisting 22nd Century Group, Inc. Lieberman (Picture) and Of Counsel Brian Calandra led the Pomerantz team. Squawk Box is the ultimate pre-market morning news program, featuring Joe Kernen, Becky Quick and Andrew Ross Sorkin.
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Further, disclosing only the underlying weakness, without disclosing the SEC investigation, was misleading because Defendants’ limited disclosure signaled to investors that the weakness was minor, when in truth the weaknesses were serious enough to attract the SEC’s attention and even make the CFO fear the loss of his CPA license and incarceration. This omission made these statements materially misleading, Plaintiffs alleged, because an SEC investigation into a barely solvent microcap company’s accounting protocols, when the company is conducting over $20 million worth of public offerings in a desperate bid to obtain capital, “significantly altered the ‘total mix’ of information made available” to a reasonable investor. Rather than tell investors the truth, however, Defendants disclosed the material weaknesses and their remediation efforts in their annual and quarterly regulatory filings, but omitted the existence of the SEC investigation. The weaknesses were so severe that the SEC was actively investigating 22nd Century, and the CFO believed he could lose his CPA license or even go to jail. As the Company was about to embark on three successive secondary stock offerings in a nine-month period, beginning in February 2016, Defendants identified material weaknesses in the Company’s accounting controls in connection with its segregation of accounting duties. The Company is also developing cannabis plants that will purportedly produce cannabis-based products that contain little or no tetrahydrocannabinol (known as THC – the primary psychoactive component in cannabis).Īs alleged in the amended complaint, 22nd Century had essentially run out of money by the start of 2016.
Securities and Exchange Commission in connection with material weaknesses in the Company’s accounting controls.Ģ2nd Century is a biotechnology company working to genetically engineer tobacco plants to produce reduced-nicotine tobacco products. This securities class action alleges, among other things, that 22nd Century Group, Inc. failed to disclose that it was the subject of an investigation by the U.S. On May 24, 2022, the 2nd Circuit reversed, in part, the district court’s decision in dismissing the Plaintiffs’ Complaint. Pomerantz LLP won 2nd circuit reversal in 22nd Century Group securities litigation.
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