SEC v. PixarBio Corporation; and Frank M. Reynolds, No. LR-26029, District of Massachusetts (June 14, 2024) — Press Release
raw: PixarBio Corp. et al.
PixarBio Corp. et al., No. LR-26029 (June 14, 2024)
The SEC has voluntarily dismissed all claims against defunct biotech firm PixarBio Corp. and deceased former CEO Frank M. Reynolds following the conclusion of related legal proceedings.
The SEC originally charged PixarBio and Frank M. Reynolds with misleading investors about non-opiate pain medication development and orchestrating a fraudulent merger scheme. Reynolds was convicted in parallel criminal proceedings on counts of securities fraud and obstructing an agency proceeding, receiving a seven-year prison sentence. The litigation has now concluded following the dismissal of claims due to the company's defunct status and Reynolds' death in 2022.
The Securities and Exchange Commission has filed a Notice of Voluntary Dismissal to conclude its litigation against PixarBio Corp. and its former CEO, Frank M. Reynolds. The 2018 complaint alleged that the biotech start-up and Reynolds misled investors regarding progress on a non-opiate pain medication delivery method and engaged in a scheme to manipulate share sales during a corporate merger. While the SEC case was stayed for parallel criminal proceedings, a federal jury found Reynolds guilty of securities fraud and obstructing an agency proceeding. Reynolds was sentenced to seven years in prison but died in custody on January 9, 2022, while his criminal appeal was pending. Following an appellate ruling to vacate his conviction and the fact that PixarBio is now defunct, the SEC has officially dismissed all remaining claims to close the matter.
Extracted insights
- organization Court
- person federal jury
- person Frank M. Reynolds
- person fraudulent scheme
- person Investors
- company PixarBio Corporation
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- organization United States Court of Appeals
- Securities And Exchange Commission filed Notice Of Voluntary Dismissal
- Securities And Exchange Commission charged PixarBio Corporation
- Frank M. Reynolds misled investors
- Frank M. Reynolds engaged fraudulent scheme
- Federal Jury found Reynolds guilty
- Court sentenced Reynolds to seven years
- United States Court Of Appeals dismissed criminal appeal
- Securities And Exchange Commission concludes litigation
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26029 / June 14, 2024 Securities and Exchange Commission v. PixarBio Corp. et al., No. 18-cv-10797-WGY (D. Mass., filed April 24, 2018) Notice of Voluntary Dismissal Filed as to Defunct Entity and Deceased CEO On June 14, 2024, the Securities and Exchange Commission filed a Notice of Voluntary Dismissal as to all claims against PixarBio Corporation and its former CEO, Frank M. Reynolds, the two remaining defendants in the case. PixarBio is defunct, and Reynolds is deceased. On April 24, 2018, the Commission charged PixarBio, a biotech start-up, and Reynolds, with misleading investors with false claims about the company’s progress in developing a purported method of delivering non-opiate, post-operative pain medication. The complaint also alleged that Reynolds, with two others, engaged in a fraudulent scheme to acquire and merge PixarBio with a publicly traded company and to secretly manipulate the sales of shares in the new entity. The Commission’s case was stayed on September 4, 2018, in connection with parallel criminal charges filed against Reynolds for the same conduct alleged in the SEC’s complaint. A federal jury found Reynolds guilty of one count of securities fraud and three counts of obstructing an agency proceeding in the parallel criminal case. He was sentenced to seven years in prison. While his criminal appeal was pending, Reynolds died in prison on January 9, 2022. The United States Court of Appeals for the First Circuit on April 9, 2024 dismissed the appeal and remanded to the district court for it to vacate the judgment of conviction and dismiss the indictment. The dismissal filed today concludes the Commission’s litigation in this matter.
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26029 / June 14, 2024 Securities and Exchange Commission v. PixarBio Corp. et al., No. 18-cv-10797-WGY (D. Mass., filed April 24, 2018) Notice of Voluntary Dismissal Filed as to Defunct Entity and Deceased CEO On June 14, 2024, the Securities and Exchange Commission filed a Notice of Voluntary Dismissal as to all claims against PixarBio Corporation and its former CEO, Frank M. Reynolds, the two remaining defendants in the case. PixarBio is defunct, and Reynolds is deceased. On April 24, 2018, the Commission charged PixarBio, a biotech start-up, and Reynolds, with misleading investors with false claims about the company’s progress in developing a purported method of delivering non-opiate, post-operative pain medication. The complaint also alleged that Reynolds, with two others, engaged in a fraudulent scheme to acquire and merge PixarBio with a publicly traded company and to secretly manipulate the sales of shares in the new entity. The Commission’s case was stayed on September 4, 2018, in connection with parallel criminal charges filed against Reynolds for the same conduct alleged in the SEC’s complaint. A federal jury found Reynolds guilty of one count of securities fraud and three counts of obstructing an agency proceeding in the parallel criminal case. He was sentenced to seven years in prison. While his criminal appeal was pending, Reynolds died in prison on January 9, 2022. The United States Court of Appeals for the First Circuit on April 9, 2024 dismissed the appeal and remanded to the district court for it to vacate the judgment of conviction and dismiss the indictment. The dismissal filed today concludes the Commission’s litigation in this matter.