Decision Diagnostics, Inc. Up Image
Image for illustration purpose only - Photo bymohamed_hassan on Pixabay

Decision Diagnostics Corp.

Class Action
  • Dismissed
Investigation
04/23/2020
Initial Lawsuit
01/15/2021
Lawsuit Progression
08/20/2021
Dismissal
04/27/2022

Investigation

Did Decision Diagnostics Corp. mislead investors about its purported plans to develop a 1-min Covid-19 test and its ability to meet the FDA testing requirements?

In March 2020, during the pandemic, the company’s CEO Berman began issuing a series of misleading statements asserting that Decision Diagnostics Corp. created a working, breakthrough technology that could accurately test for Coronavirus disease 2019 (“Covid-19”) using just a finger-prick of blood and provide results in less than a minute.

According to later revealed SEC & DOJ lawsuits, the company & Berman were having financial difficulties, notably, because Berman was spending “$360,000 in DECN company funds to pay to chat live on webcams with individuals living in foreign countries.”

Looking for “a new story”, he realized that “this coronavirus through impedance is the story that will allow [him] to raise millions.” He then asked his vendors if “technology that DECN used in glucose tests” could be used to test Covid-19. The answer was not positive, but Berman issued two press releases using the company name, claiming”new screening methodology” for COVID-19, characterized as a “break-through.”

He began issuing press releases and communicating on investorshangout and other platforms using his aliases, to “pump” DECN’s stock price. He also assured investors the company “developed a Coronavirus screening method” that would provide a positive or negative result in 15 seconds based on a small finger prick blood sample.

Berman contacted the FDA for emergency use authorization, but they responded that without a prototype and insurance to conduct scientifically reliable validation testing on human beings, the company would not receive the authorization.

Berman continued telling investors the company had a prototype, was testing it, and was close to getting FDA approval. The stock price increased by 2,050% between March and August 2020.

The SEC halted the trading and sued, the DOJ bought a criminal case. When asked by the SEC, he said he was never involved with message boards. But using his alias plutoniumimplosion” he wrote on the boards that “knock knock day” was coming, implying that “the authorities would show up at the homes of the individuals who had complained about DECN and arrest them.”

This post is open for investors to gather facts, and findings and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.

A lawsuit was subsequently filed by the holder of senior notes. We will update this post as it unfolds.

 

  • Investigation Date
    04/23/2020
  • Hypothetical Affected Period
    March 3, 2020 to December 17, 2020
  • Hypothetical Transgression
    Securities Violation
Main Event

SEC Lawsuit

12/17/2020

U.S. Agency

The SEC announces charging the company with making false and misleading claims in numerous press releases, that the company “had developed a working, break-through technology that could accurately detect Covid-19 through a quick blood test.” The SEC files a complaint against Decision Diagnostics and its CEO, alleging that in contrast to the above cited misrepresentations, Decision Diagnostics caused surges in its stock price when it “actually had at the time . . . was a theoretical concept that had not yet materialized into a product, and without a product [its CEO] knew that [the company] could not meet the FDA’s emergency use authorization testing requirements.”

See more on Factual Timeline

Initial Lawsuit

First Complaint - 01/15/2021

A shareholder brought this securities class action on behalf of a class consisting of all persons and entities other than defendants that purchased or otherwise acquired Decision Diagnostics securities between March 3, 2020 and December 17, 2020, both dates inclusive.

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) Decision Diagnostics had not developed any viable COVID-19 test, much less a test that could detect COVID-19 in less than one minute;
(ii) the Company could not meet the FDA’s EUA testing requirements for its purported COVID-19 test;
(iii) accordingly, Defendants had misrepresented the timeline within which it could realistically bring its COVID-19 test to market;
(iv) all the foregoing subjected Defendants to an increased risk of regulatory oversight and enforcement;
(v) as a result, Defendants’ public statements were materially false and misleading at all relevant times.

Defendants

  • Company
    Decision Diagnostics Corp.
  • Chief Executive Officer
    Keith M. Berman

Lawsuit progression

  • Docket Number
    2:21-cv-00418
  • Court
    California Central District Court

Lead Counsel

08/20/2021

The court issued an order appointing the lead plaintiff and lead counsel.

Amended Complaint

10/14/2021

This is a federal securities class action on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Decision Diagnostics stock between March 3, 2020 and December 17, 2020, both dates inclusive.

  • Updated Class Period
    03/03/2020 to 12/17/2020
  • Free File
    Amended Complaint

    • Operative complaint

Dismissal

On 04/27/2022, plaintiff voluntarily dismissed the complaint.

Plaintiffs filed their initial complaint on January 15, 2021, seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.

On October 14, 2021, Plaintiffs filed their Amended Complaint. The initial and Amended Complaint brought claims on behalf of Plaintiffs individually, and on behalf of a putative class of similarly-situated investors. No class has been certified, and no certification has been sought. Additionally, there has been no settlement or even settlement discussions that could potentially implicate a settlement class. Plaintiffs do not believe settlement is likely.

Defendants have not appeared, and have not answered or otherwise responded to either complaint. On February 11, 2022, the clerk entered a default as to both Defendants, Decision Diagnostics Corp. and Keith M. Berman. ECF No. 42.

Plaintiffs have determined that class certification is not feasible under the circumstances of this case. The dismissal effected by this notice is without prejudice and will not prevent any putative class member from pursuing claims individually.

Free File
Stipulation/Order of Dismissal

Factual Timeline

More

More Cases & Investigations