SEC v. Nader Pourhassan; and Kazem Kazempour, No. 8:22-cv-03284, District of Maryland (Dec. 20, 2022) — Complaint

THOMAS P. SMITH, JR.
CO-ACTING REGIONAL DIRECTOR
Sheldon L. Pollock
Adam S. Grace
Lee A. Greenwood
Howard Kim
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004-2616
212-336-1060 (Greenwood)
[email protected]

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND

SECURITIES AND EXCHANGE COMMISSION,

                                             Plaintiff,

                        -against-

NADER POURHASSAN and
KAZEM KAZEMPOUR,
  (Montgomery County)

                                             Defendants.

COMPLAINT

22 Civ. 3284

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendants Nader Pourhassan (“Pourhassan”) and Kazem Kazempour (“Kazempour”)
(collectively, “Defendants”), alleges as follows:
SUMMARY
1. This civil enforcement action concerns fraud and insider trading by Defendant
Pourhassan, the former CEO of CytoDyn Inc. (“CytoDyn”), a publicly-traded, clinical-stage
biotechnology company.
2. Beginning in 2018 and through 2021, Pourhassan repeatedly made, or caused
CytoDyn to make, materially false and misleading statements to the public about the progress of

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the company’s clinical research treatments for human immunodeficiency virus (“HIV”) and
COVID-19.
3. In April 2020, Pourhassan caused CytoDyn to falsely announce that it had
submitted a “completed” Biologics License Application (“BLA”) to the U.S. Food and Drug
Administration (“FDA”), which would have been a key milestone for the company.  In reality, as
Pourhassan knew, CytoDyn’s BLA submission was woefully incomplete—it was missing key
clinical data that the FDA had been telling the company it must include in its BLA submission
for nearly two years.
4. Within two days, the FDA alerted CytoDyn to the falsity of this press release,
which Pourhassan edited, reviewed, and approved.  But, instead of alerting the public,
Pourhassan executed on his own plan (in violation of corporate policies) to exercise stock
options and liquidate stock while the company’s stock price was artificially inflated.  All told, in
the days following the false press release, Pourhassan sold approximately $15.8 million worth of
CytoDyn stock, netting profits of more than $4.7 million.
5. Defendant Kazempour, the CEO of a contract research organization CytoDyn
hired to interface with the FDA and assist with its BLA submission, participated in the scheme
by signing off on the incomplete BLA at Pourhassan’s direction to help Pourhassan boost the
stock price.  Though Kazempour knew the FDA would ultimately reject the submission (which it
did), he managed to exercise his own CytoDyn stock options and sell more than $420,000 worth
of CytoDyn stock, for profits of more than $340,000, before the public knew what he knew.
VIOLATIONS
6. By virtue of the foregoing conduct and as alleged further herein, Pourhassan has
violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and

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Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
7. By virtue of the foregoing conduct and as alleged further herein, Kazempour has
violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15
U.S.C. § 78j(b)] and Rules 10b-5(a) and 10b-5(c) thereunder [17 C.F.R. §§ 240.10b-5(a) and
240.10b-5(c)].
8. Unless Defendants are restrained and enjoined, they will engage in the acts,
practices, transactions, and courses of business set forth in this Complaint or in acts, practices,
transactions, and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
9. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)], Exchange Act Section
21(d) [15 U.S.C. § 78u(d)], and Exchange Act 21A(a) [15 U.S.C. § 78u-1(a)].
10. The Commission seeks a final judgment:  (a) permanently enjoining Defendants
from violating the federal securities laws and rules this Complaint alleges they have violated;
(b) ordering Defendants to disgorge the ill-gotten gains they received as a result of the violations
alleged here and to pay prejudgment interest thereon pursuant to Exchange Act Sections 21(d)(5)
and 21(d)(7) [15 U.S.C. §§ 78u(d)(5), and 78u(d)(7)]; (c) ordering Defendants to pay civil
money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act
Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) ordering Pourhassan to pay a civil money penalty
pursuant to Exchange Act 21A(a) [15 U.S.C. § 78u-1(a)]; (e) permanently prohibiting
Defendants from serving as an officer or director of any company that has a class of securities
registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file reports

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under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act Section 20(e)
[15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; and (f) ordering
any other and further relief the Court may deem just and proper.
JURISDICTION AND VENUE
11. This Court has jurisdiction over this action pursuant to Securities Act Section
22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
12. Defendants, directly and indirectly, have made use of the means or
instrumentalities of interstate commerce or of the mails in connection with the transactions, acts,
practices, and courses of business alleged herein.
13. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)]
and Exchange Act Section 27 [15 U.S.C. § 78aa].  Kazempour resides in Rockville, Maryland,
and transacted business at his offices in Germantown, Maryland.  Additionally, certain acts,
practices, transactions, and courses of business alleged in this Complaint occurred within this
District, including Pourhassan’s and Kazempour’s meetings with and BLA submission to the
FDA (whose offices are located in Silver Spring, Maryland) as well as purchases of CytoDyn
stock around the times of the materially false and misleading statements described herein by at
least 400 investors located in this District.
DEFENDANTS
14. Pourhassan, age 59, resides in Lake Oswego, Oregon.  He was the CEO,
president, and a director of CytoDyn from 2012 until January 24, 2022, when the company
terminated his employment and removed him from the board of directors.
15. Kazempour, age 69, resides in Rockville, Maryland.  He is the co-founder of
Amarex Clinical Research, LLC (“Amarex”), a contract research organization for which he has

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served as president and CEO since 1998.  Previously, from approximately 1991 through 1995,
Kazempour worked in the FDA’s Division of Antiviral Drug Products.
FACTS
I. BACKGROUND ON CYTODYN
16. CytoDyn was originally a Colorado corporation formed in May 2002 under the
name RexRay Corporation.  The company was reincorporated in Delaware in August 2015, and
it remains a Delaware corporation today.
17. At all relevant times, CytoDyn’s common stock has been registered with the
Commission pursuant to Exchange Act Section 12(g) [15 U.S.C. § 78l(g)].
18. At all relevant times, prices of CytoDyn common stock have been quoted by
OTCQB, an interdealer quotation service operated by OTC Markets Group, Inc., using the ticker
symbol CYDY.
19. CytoDyn is a clinical-stage biotechnology company with its principal business
office in Vancouver, Washington.
20. At all relevant times, CytoDyn did not generate revenue; rather, it has focused on
the clinical development of treatments for various diseases, including HIV and COVID-19.
21. Specifically, CytoDyn sought to develop treatments using a monoclonal antibody
called leronlimab (also called PRO 140), which was the company’s sole potential product
candidate.
22. A BLA is a request to the FDA for permission to introduce, or deliver to
introduce, a biologic product into interstate commerce—that is, to market and sell a biologic
product to treat a disease or condition.

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23. To be considered complete, a BLA submission must include data sufficient in
quality and quantity to establish the safety, potency, and purity of a product, which includes data
from both pre-clinical and clinical studies.
24. Generally, once an applicant makes a BLA submission, the FDA conducts a
preliminary review within 60 days of receipt of the submission and informs the applicant by the
74th day after receipt whether an application is sufficiently complete to permit substantive
review.
25. If the FDA determines that a BLA is not sufficiently complete during this
preliminary review period, it will issue the applicant a “Refuse to File” letter.
26. The filing of a completed BLA is an important milestone for an early-stage
biotechnology company like CytoDyn because it indicates that the company is progressing in its
efforts to obtain FDA approval to market and sell a new drug.
27. Amarex, which has offices in Germantown, Maryland, provides clinical research
management services for “sponsors” (i.e., companies like CytoDyn) who are seeking to file a
BLA with the FDA.
28. CytoDyn retained Amarex in or about May 2014 to assist with its clinical trials of
leronlimab.
29. Until Amarex and CytoDyn ceased working together in September 2021,
CytoDyn was Amarex’s largest, most important client.
30. As part of its engagement by CytoDyn, Amarex interfaced directly with, and
served as the primary contact for, the FDA for purposes of CytoDyn’s expected BLA
submission.

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31. Kazempour routinely participated in discussions with both the FDA and CytoDyn
regarding the progress of the draft BLA materials, including one-on-one discussions with
Pourhassan.
32. By at least the end of 2017, Kazempour was also a member of CytoDyn’s
disclosure committee, a committee which discussed whether there were any material disclosures
to report in the company’s periodic filings with the Commission.
33. As part of his role as CEO, Pourhassan was integral to the issuance of CytoDyn
press releases—he typically reviewed and edited the releases and then approved the final press
release before it was issued by the company.
II. CYTODYN BEGINS THE BLA PROCESS AND ISSUES A MATERIALLY
FALSE AND MISLEADING PRESS RELEASE IN NOVEMBER 2018.
34. CytoDyn, with the assistance of Kazempour and Amarex, began the process of
preparing a BLA submission for the potential use of leronlimab to treat HIV by at least 2018.
35. On April 16, 2018, CytoDyn submitted a request to the FDA for a pre-BLA
meeting to discuss the adequacy of their nonclinical, chemistry, manufacturing and controls
(“CMC”), and clinical data to support a planned BLA submission.
36. The FDA held the requested pre-BLA meeting with CytoDyn and Amarex on
June 18, 2018, at the FDA’s offices in Silver Spring, Maryland.
37. Pourhassan and others from CytoDyn attended this meeting, along with
Kazempour and others from Amarex.
38. During the meeting, the FDA reviewed the entire BLA process, including the
contents and format of a “completed” BLA, which included clinical datasets.

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39. The FDA further advised CytoDyn and Amarex at the meeting that this “data
should be robust and FDA should not be put in a position to try to summarize or make
assumptions about this data.”
40. In the months after the pre-BLA meeting, Pourhassan repeatedly set unrealistic
internal deadlines concerning CytoDyn’s BLA submission.  Pourhassan then caused the
company to make materially false and misleading public statements that suggested these
deadlines were realistic (when they were not).
41. For example, before the market opened on November 13, 2018, CytoDyn issued a
materially false and misleading press release concerning its BLA submission timeline.
42. In that press release, CytoDyn stated that it “remains on track to complete its
filing of a [BLA] for PRO 140 as a combination therapy for HIV patients with the FDA by the
first quarter of 2019.”
43. In reality, as Pourhassan knew at the time, this timeline was impossible to meet
based on the progress of the company’s clinical trials.
44. Pourhassan reviewed and approved this press release before it was issued.
45. After CytoDyn issued this release on November 13, 2018, its stock opened up 5%
at $0.59 and the trading volume that day was approximately 279,400 shares—more than double
the volume the prior day and nearly double the volume the following day.
46. The November 13, 2018, press release also stated that CytoDyn’s clinical trial had
shown HIV viral load suppression at a “92% Responder Rate” when the tested dosage of PRO
140 was increased from 350 milligrams to 700 milligrams.

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47. During a teleconference on December 14, 2018, between the FDA, CytoDyn
(including Pourhassan), and Amarex (including Kazempour), the FDA stated that it had not seen
the study data to validate this information.
48. Additionally, on December 28, 2018, the FDA sent a memorandum to Kazempour
in which it raised concerns about an “overly optimistic timeline for your BLA submission” given
CytoDyn’s request to allow amendments to its ongoing clinical trials to collect at least 12 weeks
of data from at least 100 subjects receiving the higher 700 milligram dosage.
49. The memorandum reminded CytoDyn of the information it needed to submit with
its BLA submission, which included clinical datasets.
50. The memorandum also raised questions about how the “92% Responder Rate”
was calculated and asked for more data before the FDA could agree to permit the increased
dosage to be used for all subjects.
51. On January 3, 2019, Kazempour responded to the FDA thanking them for the
feedback and the summary of the information to be included in their BLA submission.
III. AS CYTODYN FAILS TO FILE ITS BLA IN 2019 AND EARLY 2020,
POURHASSAN GROWS CONCERNED ABOUT THE STOCK PRICE IMPACT.
52. 2019 came and went without CytoDyn filing its BLA.
53. Throughout 2019, CytoDyn (through Kazempour and Amarex) and the FDA were
in communication regarding information and data that would be necessary in order for CytoDyn
to file a completed BLA.
54. For example, on December 16, 2019, the FDA sent a memorandum to Kazempour
in which it stated that, “[w]ith your BLA submission, you should submit an integrated
assessment and detailed summary that supports your selected dose and incorporates virologic
outcomes, safety data (including laboratory abnormalities), exposure related data (including

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population pharmacokinetics and exposure response relationship analyses), receptor occupancy
data (including both method validation report and bioanalytical report of clinical samples), and
anti-idiotypic antibody data (including both method validation report and bioanalytical report of
clinical samples).”
55. The memorandum again reminded Kazempour that “the data you submit with
your BLA must be sufficiently complete and accurate to allow FDA reviewed to evaluate your
selected dose.”
56. At this time, Pourhassan sought to tie his own compensation to the BLA filing.
57. On December 19, 2019, Pourhassan sought and obtained approval from
CytoDyn’s board to award him (and others) stock options that would vest upon the filing of the
company’s BLA submission.
58. Specifically, Pourhassan received a stock option award of 2,000,000 shares of
CytoDyn common stock, with an exercise price of $0.63, which would automatically vest upon
the filing of the BLA submission.
59. Pourhassan’s unrealistic expectations and deadlines put pressure on both CytoDyn
and Amarex employees.
60. For example, CytoDyn Employee-1 was working their team seven days a week to
try to meet Pourhassan’s deadlines.
61. Amarex Employee-1 viewed CytoDyn as a “pushy” client that routinely set
unreasonable turnaround times for various deliverables.
62. In late December 2019, Pourhassan set a January 2020 deadline for CytoDyn to
make its BLA submission.

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63. But, by January 2020, there were a number of deliverables necessary for the BLA
submission still pending.
64. In mid-January 2020, Amarex Employee-2 told Pourhassan that it was not
possible to submit the BLA by the end of the month.
65. Nevertheless, in a text message on January 29, 2020, Pourhassan asked Amarex
Employee-2 whether CytoDyn could file its BLA submission the next day.
66. Pourhassan was concerned that CytoDyn’s BLA filing delays were negatively
impacting the company’s stock price.
67. For example, in a text message on February 8, 2020, Pourhassan told Kazempour
and Amarex Employee-2 that “We told the public on Thursday that the BLA is delayed until the
end of February and on Thursday and Friday our stock dropped and our market cap went down
by $200 million and everyone is asking for my head.  If we can’t get BLA done by the end of
February we will have another tremendous drop in our stock.”
68. And, in a text message on February 24, 2020, Pourhassan told Kazempour that he
was “really in need of your help with our BLA.  We signed an extra work order of about $150k
so we could get it done by the end of JANUARY and now we are at the end of FEBRUARY and
I am losing a lot of credibility among our shareholders.”
69. In or about early 2020, Pourhassan asked a CytoDyn consultant for certain data
(i.e., receptor occupancy data) required for inclusion in the clinical module for the BLA.  The
CytoDyn consultant shared with Pourhassan a spreadsheet that indicated that the consultant did
not even have the samples needed to generate that data, let alone the data itself.

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IV. POURHASSAN CAUSES CYTODYN TO ISSUE A PRESS RELEASE FALSELY
STATING THAT IT HAD FILED A “COMPLETED” BLA SUBMISSION.
70. By the beginning of April 2020, after already missing various deadlines set by
Pourhassan, Amarex was still seeking to complete the clinical datasets that were needed for the
BLA submission.
71. Knowing these clinical datasets were not complete, Pourhassan asked CytoDyn
Employee-1 and Amarex Employee-2 in an email on April 6, 2020, “if we can file both sections
of BLA (CMC and Clinical) no later than April 15 and if we do what will we be risking?”
72. Then, on April 14, 2020, Pourhassan emailed Kazempour along with CytoDyn
Employee-1 and Amarex Employee-2, complaining that CytoDyn’s stock had dropped “in 1 hour
almost 20%” despite the company having released what Pourhassan described as “great results
about COVID-19 patients.”
73. During this time period in 2020, CytoDyn had also initiated clinical studies to
determine if leronlimab could be used to treat COVID-19.
74. Pourhassan further stated in his April 14, 2020, email that “[t]his drop will be
much deeper if we don’t file our BLA as the [stock] message board now is getting bombarded by
investors who are very frustrated with me and CytoDyn.”
75. Accordingly, Pourhassan directed the recipients of his email to “file the BLA no
later than next week Wednesday, even if we are short in no matter what portion of whatever it is
that we are short.”
76. Pourhassan further stated in his email that, if CytoDyn’s stock price continued to
drop, the company would have “problems financing itself” and that, as a result “THE MOST
IMPORTANT thing now is BLA.  Please focus on that urgently only.”

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77. In response to Pourhassan’s instruction, Amarex filed CytoDyn’s BLA with the
FDA approximately two weeks later on April 27, 2020.
78. Kazempour electronically signed the cover letter for the BLA submission, which
was on CytoDyn letterhead, as the “US Agent for CytoDyn, Inc.”
79. Kazempour’s BLA cover letter made clear that the BLA submission was missing
certain datasets and was otherwise not complete.  The letter further stated that “[r]evised datasets
will be submitted to the BLA as an amendment in May 2020,” noting the missing datasets in a
table below in red font.
80. Kazempour applied his electronic signature to the BLA cover letter on Sunday,
April 26, 2020, the day before the BLA filing itself.
81. The deficiencies in CytoDyn’s BLA submission were not trivial; the submission
was missing clinical datasets that the FDA had repeatedly reminded Kazempour, Amarex,
Pourhassan, and CytoDyn were core to the FDA’s substantive review process.
82. As Kazempour himself stated in a declaration he signed in a private litigation
between Amarex and CytoDyn, despite repeated warnings, “Pourhassan directed Amarex to file
the BLA prematurely, knowing it was incomplete, lacking in appropriate content, and not ready
for submission.”
83. Citing Pourhassan’s April 14, 2020, email, Kazempour further stated in this
declaration that Pourhassan’s “justification for his premature direction, as stated in his email,
stems from a stock price drop and to ‘allay investors who are very frustrated with me and
CytoDyn.’”

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84. Kazempour also stated in his declaration that, at Pourhassan’s direction, “Amarex
submitted the incomplete and lacking BLA to the FDA,” which was “[n]ot surprisingly” rejected
as incomplete.
85. Kazempour further admitted in this declaration that “Pourhassan and CytoDyn
received exactly what was to be expected, a refusal to file [letter from the FDA] for missing and
incomplete information.”
86. On April 27, 2020, CytoDyn issued a press release touting its BLA submission
before the market opened that day.
87. Specifically, the title of the press release stated that CytoDyn had submitted a
“completed” BLA to the FDA for leronlimab as a combination therapy for HIV.
88. The press release further stated that CytoDyn “has submitted the clinical, and the
CMC (chemistry, manufacturing and controls) portions of its BLA” to the FDA.
89. Pourhassan himself was quoted in the press release, saying “The submission of
the final two parts of the BLA is a significant milestone for the Company, and initiates its
transition from a development-stage company to a commercial organization.”
90. In reality, as Pourhassan knew, CytoDyn’s BLA submission was not complete.
91. As the cover letter signed by Kazempour acknowledged, the BLA did not contain
all the information the FDA had previously requested in order to substantively review the
submission.
92. Among other deficiencies, the BLA submission lacked required clinical datasets
that the FDA had previously advised CytoDyn and Amarex were required for a completed
submission.

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93. Pourhassan directed CytoDyn employees to prepare the April 27, 2020, press
release that touted the submission of a completed BLA, he reviewed drafts and made edits to the
release, and he authorized CytoDyn to issue the release.
94. Based on his prior communications with Pourhassan, Kazempour knew or was
reckless as to whether Pourhassan would issue a press release stating that CytoDyn had filed a
completed BLA when, in fact, it had not.
95. Pourhassan convinced CytoDyn’s board of directors to award Kazempour
warrants to purchase an additional 200,000 shares of CytoDyn stock as a reward for
Kazempour’s work in helping to file the (incomplete) BLA submission.
96. On April 24, 2020, Pourhassan texted Kazempour to let him know that CytoDyn’s
board had approved the issuance of these warrants.
97. Kazempour later texted Pourhassan and asked him to put the warrants in
Kazempour’s wife’s name.
98. On April 27, 2020, after CytoDyn issued this press release, CytoDyn’s stock price
closed up over 17% on 80% increased trading volume.
V. THE FDA REBUKES CYTODYN FOR ITS FALSE BLA PRESS RELEASE.
99. The FDA’s response to CytoDyn’s false press release lauding its filing of a
completed BLA submission was swift.
100. On April 29, 2020, a senior regulatory project manager at the FDA emailed
Kazempour with the subject line “BLA 761144 – Remains Incomplete” and sent the email with
“High” importance.
101. In the email, the FDA official stated that CytoDyn’s submission included an
“incomplete clinical module to support this BLA application” and specifically took issue with
the use of the word “completed” in the title of CytoDyn’s press release on April 27, 2020.

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102. The FDA official also stated in the email that the FDA had informed CytoDyn on
multiple occasions, including by providing them with links to guidance, “that the BLA review
clock does not begin until a complete BLA was submitted.”
103. The FDA official further stated in the email that CytoDyn’s “April 27, 2020,
submissions do not constitute a completed BLA as CytoDyn has reported to the public via press
release,” and that “[t]he BLA application is not considered complete as you yourself
acknowledged in your covering letter with the April 27, 2020, submission – noting that the
clinical datasets remain outstanding.”
104. The FDA official further requested that Kazempour, as CytoDyn’s regulatory
agent, “take regulatory responsibility for the misinformation released in the aforementioned
Press Release by notifying CytoDyn.”
105. Amarex Employee-2 forwarded the FDA official’s email to Pourhassan the next
day, April 30, 2020, at approximately 5:30 p.m. ET.
106. By then, as described in more detail below, Pourhassan had already begun
exercising vested stock options and selling CytoDyn shares.
107. On May 4, 2020, CytoDyn issued a press release concerning the possible use of
leronlimab for the treatment of COVID-19.  The release was titled:  “FDA Approves 54
Emergency INDs for Leronlimab Treatment of Coronavirus – CytoDyn Requests Compassionate
Use from FDA for COVID.”
108. In the middle of the eighth paragraph in that press release, CytoDyn stated that its
BLA submission (concerning the possible use of leronlimab for the treatment of HIV) “will be
considered completed after the clinical datasets are submitted on May 11, 2020,” and conceding
that the April 27, 2020, BLA submission had not, in fact, been considered complete by the FDA.

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109. Pourhassan reviewed and approved the issuance of this press release by CytoDyn.
110. On May 13, 2020, CytoDyn issued another press release concerning its BLA
submission, which stated that the company had completed the submission of all remaining parts
on May 11, 2020.
111. Pourhassan reviewed and approved the issuance of this press release by CytoDyn.
112. Again, however, and as Pourhassan well knew, CytoDyn’s May 11, 2020, BLA
submission was not complete because it did not (and could not have) included the required
information, data, and analysis.
113. On July 8, 2020, the FDA sent Kazempour, as the regulatory agent for CytoDyn, a
Refuse to File letter for the May 11, 2020, BLA submission.
114. The notice stated that the BLA submission by CytoDyn on May 11, 2020, “does
not contain all pertinent information and data needed to complete a substantive review.”
115. The notice summarized four sets of deficiencies in the BLA:  “Absence of
Analyses of Data Supporting the Proposed Dose, “Electronic Dataset Quality Issues,” “Absence
of Demographic Subset Analyses Needed for Substantive Review of Product Effectiveness and
Safety,” and “Device-Related Issues.”
116. CytoDyn never filed a completed BLA submission with the FDA.
117. On October 28, 2022, CytoDyn announced in a press release that it was
withdrawing its BLA, citing issues “related to the quality of data collection and monitoring of the
pivotal clinical trials by the clinical research organization [ ] contracted to manage the trials.”
VI. POURHASSAN SELLS MILLIONS OF DOLLARS OF CYTODYN STOCK
WHILE IN POSSESSION OF MATERIAL NONPUBLIC INFORMATION
ABOUT CYTODYN’S BLA SUBMISSION.
118. At all relevant times, CytoDyn had a policy that prohibited insider trading by all
of its officers, directors, and employees (the “Insider Trading Policy”).

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119. Specifically, the Insider Trading Policy prohibited all of CytoDyn officers,
directors, and employees who are aware of material nonpublic information related to CytoDyn
from engaging in transactions in the securities of CytoDyn.
120. Among other transactions, the Insider Trading Policy expressly covered the sale
of CytoDyn common stock.
121. The Insider Trading Policy applied to Pourhassan, who was both an officer and
director of CytoDyn.
122. The Insider Trading Policy stated that material information is “information for
which there is a substantial likelihood that a reasonable investor would consider such
information important in making his or her investment decisions, or information that could be
reasonably expected to affect the price of a company’s securities, whether it is positive or
negative.”
123. The Insider Trading Policy further stated that “nonpublic” information is
“information which has not been made available to investors generally.”
124. The Insider Trading Policy warned that the penalties for the purchase or sale of
CytoDyn securities while aware of material nonpublic information are “severe” and include
“substantial jail terms,” “disgorgement of profits,” “fines for the person who committed the
violation of several times the profit gained or loss avoided, whether or not the person actually
benefited,” and “orders barring individual from serving as a director or officer of a public
company.”
125. Between April 30, 2020, and May 4, 2020, Pourhassan sold $15,760,909.87 worth
of CytoDyn stock, the vast majority of which he acquired through the exercise of vested stock
options.

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126. When he sold this stock, Pourhassan knew that CytoDyn’s BLA submission,
which a press release had trumpeted as “complete,” was not complete and, in fact, was missing
key clinical datasets.
127. Over the course of just three trading days, Pourhassan sought to, and did, sell the
maximum number of shares that he was permitted to sell in a three-month period pursuant to the
volume limitations for sales by affiliates (like Pourhassan) of an issuer (like CytoDyn).  These
volume limitations are contained in Commission Rule 144(e) [17 C.F.R. § 230.144(e)].
128. In order to exercise these options, Pourhassan signed 12 option exercise forms.
129. Pourhassan confirmed in each such form that his sales of the shares he was to
acquire by exercising these options would comply with the Insider Trading Policy.
130. Pourhassan also signed a Form 144 for the stock he sold on April 30, 2020.  In it,
Pourhassan certified that he was not in possession of material nonpublic information.
131. By at least April 23, 2020, Pourhassan caused others at CytoDyn to prepare the
paperwork that would enable him to exercise these options and place these trades.
132. Pourhassan began discussing his planned options exercise with his brokers on or
about April 28, 2020.
133. On April 30, 2020, Pourhassan exercised 11 sets of options to acquire 5,381,167
shares of CytoDyn stock, which represented a nearly 1,700% increase in his holdings of
CytoDyn stock.
134. One of the options that Pourhassan exercised on April 30, 2020, was for the
2,000,000 shares with an exercise price of $0.63 that he received in December 2019 and which
had just vested upon the filing of the BLA submission three days before.

20
135. The same day, Pourhassan sold 2,219,837 shares of CytoDyn stock for proceeds
of $7,838,688.41.
136. On May 1, 2020, Pourhassan sold an additional 1,399,685 shares of CytoDyn
stock for proceeds of $4,569,131.71.
137. The following Monday, May 4, 2020, Pourhassan exercised an additional option
to acquire 30,933 shares of CytoDyn stock.
138. The same day, Pourhassan sold 1,201,652 shares of CytoDyn stock for proceeds
of $3,353,089.74.
139. Of the approximately $15.8 million that Pourhassan’s sales of CytoDyn stock
generated, he paid a total of approximately $11 million back to CytoDyn—$3,792,058.00 to pay
the exercise prices of the options and $7,247,450.63 in tax payments.
140. Accordingly, Pourhassan netted a profit of $4,721,401.24 on these sales.
VII. KAZEMPOUR SELLS HUNDREDS OF THOUSANDS OF DOLLARS OF
CYTODYN STOCK BEFORE THE FDA’S REFUSE TO FILE LETTER.
141. On April 28, 2020, the day after CytoDyn issued its materially false press release
concerning a “completed” BLA submission, Kazempour emailed CytoDyn’s chief financial
officer and indicated that he wanted to exercise a previously-issued warrant so that he could
obtain and sell 150,000 shares of CytoDyn common stock.
142. Kazempour followed up with another email to CytoDyn’s chief financial officer
on May 15, 2020, asking if Kazempour could pay the exercise price for those 150,000 warrant
shares.
143. Thereafter, Kazempour paid CytoDyn $84,750 to obtain the shares (i.e., an
exercise price of $0.565 per share) and deposited the shares into his brokerage account.

21
144. On June 9 and 10, 2020, Kazempour sold these 150,000 shares of CytoDyn stock
for total proceeds of $427,475.67.
145. Accordingly, Kazempour received a pre-tax profit of $342,725.67 from his sales
of these shares.
146. At the time of these sales, Kazempour knew that the BLA submission he had filed
was not complete and expected the FDA to issue a Refuse to File letter, which it ultimately did a
month later.
VIII. CYTODYN AND POURHASSAN MAKE ADDITIONAL MATERIALLY FALSE
AND MISLEADING STATEMENTS ABOUT COVID-19 TRIALS IN 2021.
147. In addition to the press releases Pourhassan caused CytoDyn to issue concerning
its BLA submission for the use of leronlimab as a possible treatment for HIV, Pourhassan also
was responsible for materially false and misleading statements related to the company’s clinical
trials for the use of leronlimab as a possible treatment for COVID-19.
148. CytoDyn obtained permission from the FDA to conduct clinical trials to treat
COVID-19 in early 2020.  Amarex conducted those trials.
149. In or about January 2021 CytoDyn obtained the results from one of its clinical
trial, which was called the “CD12 Trial.”
150. The CD12 Trial did not meet any of its primary or secondary “endpoints”—that
is, the specific objectives of the trial identified before its initiation.
151. Though companies typically prepare lengthy reports to the FDA concerning
clinical trial results, CytoDyn prepared and submitted to the FDA an “executive summary” of the
CD12 Trial on February 16, 2021.
152. At Pourhassan’s direction, Amarex included “subgroup” analysis in the executive
summary—that is, analysis of smaller groups of subjects as opposed to the full trial group—in

22
order to make the results of the CD12 Trial sound better than they were.  CytoDyn Employee-2
was pressured to include this information by Pourhassan.
153. On February 18 and 25, 2021, the FDA sent letters to CytoDyn Employee-2
stating that it did not agree with CytoDyn’s conclusions related to the benefits of leronlimab for
the treatment of COVID-19 patients based on its subgroup analysis.
154. Nevertheless, on March 8, 2021, CytoDyn publicly announced the results of the
CD12 Trial by emphasizing the same subgroup analysis that had been rejected by the FDA.
155. Further, at Pourhassan’s direction, on March 8 and March 30, 2021, CytoDyn
issued press releases that suggested that the CD12 Trial had demonstrated that leronlimab
decreased mortality for severe-to-critically ill patients with COVID-19 through the use of this
same subgroup analysis.
156. In reality, as Pourhassan knew from CytoDyn Employee-2 and the FDA’s
correspondence, the CD12 Trial had not met its key endpoints, which made touting subgroup
analysis, which was not the point of the trial, misleading.
157. Pourhassan reviewed and approved the issuance of these press releases by
CytoDyn.
158. CytoDyn issued both March 2021 press releases before the markets opened each
day and the releases resulted in significantly higher trading volume.
159. On March 8, 2021, the trading volume that day was approximately 21,383,800
shares, or 460% higher than the trading volume the prior trading day.
160. On March 30, 2021, the trading volume was approximately 10,878,600 shares, or
330% higher than the trading volume the prior trading day.

23
161. On April 14, 2021, CytoDyn filed a Form 10-Q with the Commission that stated
that the results of the CD12 Trial were reported in the Form 8-K it had filed on March 8, 2021.
162. Ultimately, on May 17, 2021, the FDA put out a public statement about
leronlimab in order to correct the misleading information in CytoDyn’s press releases.
163. In that statement, the FDA clarified that, based on these same clinical trials, “it
has become clear that the data currently available do not support the clinical benefit of
leronlimab for the treatment of COVID-19.”
164. The FDA further explained in its statement that CytoDyn’s press releases had
communicated differences in “small subgroups” from the CD12 trial, which has “well-
established limitations, especially in the context of a clinical trial that has failed to show a benefit
in the overall study population.”
165. In addition to causing CytoDyn to issue false and misleading press releases,
Pourhassan participated in video “interviews” by a company called Proactive Media.
166. Proactive Media describes itself as a “financial media portal” that provides news,
commentary, and analysis on hundreds of public and private companies.
167. Pourhassan retained Proactive Media on behalf of CytoDyn and CytoDyn paid
Proactive Media at least $25,000 for its services.
168. For each of these “interviews,” Pourhassan would provide a script to the
interviewer with questions to ask and talking points from recent CytoDyn press releases.
Pourhassan would then use the video as a way to promote CytoDyn’s stock to investors or
potential investors.

24
169. These videos were posted both on Proactive Media’s website and on its channel
on YouTube.com.  Certain of the videos, including the video described below, were also made
available via hyperlink from CytoDyn’s corporate website.
170. In one of these videos, which was posted on or about September 22, 2021,
Pourhassan made a number of misleading statements that suggested leronlimab had been
established as safe and effective for the treatment of COVID-19.  For example, Pourhassan stated
the following in the video:
a. “In the United States, we did a trial of 394 patients which included severe
and critically ill population. In the critically-ill population, our results were really strong.”
b. “Our critically-ill population that we did in the United States when we
gave a dose of leronlimab, the survival rate was 78%.  Once we gave them another dose, the
survival rate went up to 82%.”
c. “Imagine, if 78% went to 82, the next one would be maybe 88, and then
95. I am making up numbers, but if it goes to that kind of numbers, if it just follows the same
pattern what we learned, this is going to be the most fantastic results anybody could ever
imagined to have. Now I’m not saying that’s what we’re going to get, but I’m saying that’s what
the results are showing.”
d. “The primary endpoint . . . is the discharge, the rate of patients who get on
ventilator and get discharged.  That endpoint was 166% better in our trial that we did in the
United States versus placebo.  166%.”
171. In reality, as Pourhassan well knew, he had again mischaracterized CytoDyn’s
COVID-19 clinical trials, which the FDA had previously told him and the public just four

25
months earlier (in its statement on May 17, 2021) “do not support the clinical benefit of
leronlimab for the treatment of COVID-19.”
172. On February 11, 2022, the FDA issued a warning letter to CytoDyn about this
video.
173. In the letter, the FDA stated that the September 2021 video “represents in a
promotional context that leronlimab, an investigational new drug, is safe and effective for the
purpose for which it is being investigated or otherwise promotes the drug.”
174. The FDA concluded that, “[a]s a result, leronlimab is misbranded under section
502(f)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and is in violation of section
301(a) of the FD&C Act.”
175. The FDA further advised that “the video is concerning from a public health
perspective because it suggests that leronlimab provides a clinical benefit to individuals with
[COVID-19],” despite the fact that it “has not been approved or authorized by the FDA and
whose safety and efficacy has not yet been established.”
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(Pourhassan and Kazempour)

176. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 175.
177. Defendants, directly or indirectly, singly or in concert, in the offer or sale of
securities and by the use of the means or instruments of transportation or communication in
interstate commerce or the mails, (i) knowingly or recklessly have employed one or more
devices, schemes or artifices to defraud, (ii) knowingly, recklessly, or negligently have obtained
money or property by means of one or more untrue statements of a material fact or omissions of

26
a material fact necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading, and/or (iii) knowingly, recklessly, or negligently
have engaged in one or more transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon the purchaser.
178. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C.
§ 77q(a)].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
(Pourhassan)

179. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 175.
180. Pourhassan, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly has (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one
or more untrue statements of a material fact or omitted to state one or more material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon other persons.
181. By reason of the foregoing, Pourhassan, directly or indirectly, singly or in concert,
has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C.
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

27
THIRD CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder
(Kazempour)

182. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 175.
183. Kazempour, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly has (i) employed one or more devices, schemes, or artifices to defraud, and/or (ii)
engaged in one or more acts, practices, or courses of business which operated or would operate
as a fraud or deceit upon other persons.
184. By reason of the foregoing, Kazempour, directly or indirectly, singly or in
concert, has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15
U.S.C. § 78j(b)] and Rules 10b-5(a) and 10b-5(c) thereunder [17 C.F.R. §§ 240.10b-5(a) and
240.10b-5(c)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Defendant Pourhassan, his agents, servants, employees, and
attorneys and all persons in active concert or participation with any of them from violating,
directly or indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];

28
II.
Permanently enjoining Defendant Kazempour, his agents, servants, employees, and
attorneys and all persons in active concert or participation with any of them from violating,
directly or indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and 10b-5(c) thereunder [17 C.F.R.
§§ 240.10b-5(a) and 240.10b-5(c)];
III.
Ordering Defendants to disgorge all ill-gotten gains they received directly or indirectly,
with prejudgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act
Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5), and 78u(d)(7)];
IV.
Ordering Defendants to pay civil monetary penalties under Securities Act Section 20(d)
[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];
V.
Ordering Pourhassan to pay a civil money penalty pursuant to Exchange Act 21A(a) [15
U.S.C. § 78u-1(a)];
VI.
Permanently prohibiting Defendants from serving as an officer or director of any
company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. §
78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)],
pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2)
[15 U.S.C. § 78u(d)(2)];

29
VII.
Granting any other and further relief this Court may deem just and proper.

Dated:  New York, New York
 December 20, 2022

/s/ Thomas P. Smith, Jr.
THOMAS P. SMITH, JR.
CO-ACTING REGIONAL DIRECTOR
Sheldon L. Pollock
Adam S. Grace
Lee A. Greenwood
Howard Kim
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004
212-336-1060 (Greenwood)
[email protected]

THOMAS P. SMITH, JR. 
CO-ACTING REGIONAL DIRECTOR 
Sheldon L. Pollock 
Adam S. Grace 
Lee A. Greenwood 
Howard Kim 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616 
212-336-1060 (Greenwood) 
[email protected]  
 
UNITED STATES DISTRICT COURT 
DISTRICT OF MARYLAND 

 
SECURITIES AND EXCHANGE COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 

NADER POURHASSAN and  
KAZEM KAZEMPOUR, 
  (Montgomery County)    
  
                                             Defendants. 
 

 
 
COMPLAINT 

   
22 Civ. 3284 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendants Nader Pourhassan (“Pourhassan”) and Kazem Kazempour (“Kazempour”) 

(collectively, “Defendants”), alleges as follows: 

SUMMARY 

1. This civil enforcement action concerns fraud and insider trading by Defendant 

Pourhassan, the former CEO of CytoDyn Inc. (“CytoDyn”), a publicly-traded, clinical-stage 

biotechnology company. 

2. Beginning in 2018 and through 2021, Pourhassan repeatedly made, or caused 

CytoDyn to make, materially false and misleading statements to the public about the progress of 

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the company’s clinical research treatments for human immunodeficiency virus (“HIV”) and 

COVID-19. 

3. In April 2020, Pourhassan caused CytoDyn to falsely announce that it had 

submitted a “completed” Biologics License Application (“BLA”) to the U.S. Food and Drug 

Administration (“FDA”), which would have been a key milestone for the company.  In reality, as 

Pourhassan knew, CytoDyn’s BLA submission was woefully incomplete—it was missing key 

clinical data that the FDA had been telling the company it must include in its BLA submission 

for nearly two years.   

4. Within two days, the FDA alerted CytoDyn to the falsity of this press release, 

which Pourhassan edited, reviewed, and approved.  But, instead of alerting the public, 

Pourhassan executed on his own plan (in violation of corporate policies) to exercise stock 

options and liquidate stock while the company’s stock price was artificially inflated.  All told, in 

the days following the false press release, Pourhassan sold approximately $15.8 million worth of 

CytoDyn stock, netting profits of more than $4.7 million. 

5. Defendant Kazempour, the CEO of a contract research organization CytoDyn 

hired to interface with the FDA and assist with its BLA submission, participated in the scheme 

by signing off on the incomplete BLA at Pourhassan’s direction to help Pourhassan boost the 

stock price.  Though Kazempour knew the FDA would ultimately reject the submission (which it 

did), he managed to exercise his own CytoDyn stock options and sell more than $420,000 worth 

of CytoDyn stock, for profits of more than $340,000, before the public knew what he knew. 

VIOLATIONS 

6. By virtue of the foregoing conduct and as alleged further herein, Pourhassan has 

violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and 

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Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

7. By virtue of the foregoing conduct and as alleged further herein, Kazempour has 

violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 

U.S.C. § 78j(b)] and Rules 10b-5(a) and 10b-5(c) thereunder [17 C.F.R. §§ 240.10b-5(a) and 

240.10b-5(c)]. 

8. Unless Defendants are restrained and enjoined, they will engage in the acts, 

practices, transactions, and courses of business set forth in this Complaint or in acts, practices, 

transactions, and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

9. The Commission brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)], Exchange Act Section 

21(d) [15 U.S.C. § 78u(d)], and Exchange Act 21A(a) [15 U.S.C. § 78u-1(a)].  

10. The Commission seeks a final judgment:  (a) permanently enjoining Defendants 

from violating the federal securities laws and rules this Complaint alleges they have violated; 

(b) ordering Defendants to disgorge the ill-gotten gains they received as a result of the violations 

alleged here and to pay prejudgment interest thereon pursuant to Exchange Act Sections 21(d)(5) 

and 21(d)(7) [15 U.S.C. §§ 78u(d)(5), and 78u(d)(7)]; (c) ordering Defendants to pay civil 

money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act 

Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) ordering Pourhassan to pay a civil money penalty 

pursuant to Exchange Act 21A(a) [15 U.S.C. § 78u-1(a)]; (e) permanently prohibiting 

Defendants from serving as an officer or director of any company that has a class of securities 

registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file reports 

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under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act Section 20(e) 

[15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; and (f) ordering 

any other and further relief the Court may deem just and proper. 

JURISDICTION AND VENUE 

11. This Court has jurisdiction over this action pursuant to Securities Act Section 

22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].  

12. Defendants, directly and indirectly, have made use of the means or 

instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, 

practices, and courses of business alleged herein. 

13. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] 

and Exchange Act Section 27 [15 U.S.C. § 78aa].  Kazempour resides in Rockville, Maryland, 

and transacted business at his offices in Germantown, Maryland.  Additionally, certain acts, 

practices, transactions, and courses of business alleged in this Complaint occurred within this 

District, including Pourhassan’s and Kazempour’s meetings with and BLA submission to the 

FDA (whose offices are located in Silver Spring, Maryland) as well as purchases of CytoDyn 

stock around the times of the materially false and misleading statements described herein by at 

least 400 investors located in this District. 

DEFENDANTS 

14. Pourhassan, age 59, resides in Lake Oswego, Oregon.  He was the CEO, 

president, and a director of CytoDyn from 2012 until January 24, 2022, when the company 

terminated his employment and removed him from the board of directors.   

15. Kazempour, age 69, resides in Rockville, Maryland.  He is the co-founder of 

Amarex Clinical Research, LLC (“Amarex”), a contract research organization for which he has 

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served as president and CEO since 1998.  Previously, from approximately 1991 through 1995, 

Kazempour worked in the FDA’s Division of Antiviral Drug Products.   

FACTS 

I. BACKGROUND ON CYTODYN 

16. CytoDyn was originally a Colorado corporation formed in May 2002 under the 

name RexRay Corporation.  The company was reincorporated in Delaware in August 2015, and 

it remains a Delaware corporation today. 

17. At all relevant times, CytoDyn’s common stock has been registered with the 

Commission pursuant to Exchange Act Section 12(g) [15 U.S.C. § 78l(g)].  

18. At all relevant times, prices of CytoDyn common stock have been quoted by 

OTCQB, an interdealer quotation service operated by OTC Markets Group, Inc., using the ticker 

symbol CYDY. 

19. CytoDyn is a clinical-stage biotechnology company with its principal business 

office in Vancouver, Washington.   

20. At all relevant times, CytoDyn did not generate revenue; rather, it has focused on 

the clinical development of treatments for various diseases, including HIV and COVID-19. 

21. Specifically, CytoDyn sought to develop treatments using a monoclonal antibody 

called leronlimab (also called PRO 140), which was the company’s sole potential product 

candidate.   

22. A BLA is a request to the FDA for permission to introduce, or deliver to 

introduce, a biologic product into interstate commerce—that is, to market and sell a biologic 

product to treat a disease or condition. 

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23. To be considered complete, a BLA submission must include data sufficient in 

quality and quantity to establish the safety, potency, and purity of a product, which includes data 

from both pre-clinical and clinical studies. 

24. Generally, once an applicant makes a BLA submission, the FDA conducts a 

preliminary review within 60 days of receipt of the submission and informs the applicant by the 

74th day after receipt whether an application is sufficiently complete to permit substantive 

review. 

25. If the FDA determines that a BLA is not sufficiently complete during this 

preliminary review period, it will issue the applicant a “Refuse to File” letter. 

26. The filing of a completed BLA is an important milestone for an early-stage 

biotechnology company like CytoDyn because it indicates that the company is progressing in its 

efforts to obtain FDA approval to market and sell a new drug. 

27. Amarex, which has offices in Germantown, Maryland, provides clinical research 

management services for “sponsors” (i.e., companies like CytoDyn) who are seeking to file a 

BLA with the FDA.    

28. CytoDyn retained Amarex in or about May 2014 to assist with its clinical trials of 

leronlimab. 

29. Until Amarex and CytoDyn ceased working together in September 2021, 

CytoDyn was Amarex’s largest, most important client. 

30. As part of its engagement by CytoDyn, Amarex interfaced directly with, and 

served as the primary contact for, the FDA for purposes of CytoDyn’s expected BLA 

submission. 

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31. Kazempour routinely participated in discussions with both the FDA and CytoDyn 

regarding the progress of the draft BLA materials, including one-on-one discussions with 

Pourhassan. 

32. By at least the end of 2017, Kazempour was also a member of CytoDyn’s 

disclosure committee, a committee which discussed whether there were any material disclosures 

to report in the company’s periodic filings with the Commission.   

33. As part of his role as CEO, Pourhassan was integral to the issuance of CytoDyn 

press releases—he typically reviewed and edited the releases and then approved the final press 

release before it was issued by the company. 

II. CYTODYN BEGINS THE BLA PROCESS AND ISSUES A MATERIALLY 
FALSE AND MISLEADING PRESS RELEASE IN NOVEMBER 2018. 

34. CytoDyn, with the assistance of Kazempour and Amarex, began the process of 

preparing a BLA submission for the potential use of leronlimab to treat HIV by at least 2018. 

35. On April 16, 2018, CytoDyn submitted a request to the FDA for a pre-BLA 

meeting to discuss the adequacy of their nonclinical, chemistry, manufacturing and controls 

(“CMC”), and clinical data to support a planned BLA submission. 

36. The FDA held the requested pre-BLA meeting with CytoDyn and Amarex on 

June 18, 2018, at the FDA’s offices in Silver Spring, Maryland. 

37. Pourhassan and others from CytoDyn attended this meeting, along with 

Kazempour and others from Amarex. 

38. During the meeting, the FDA reviewed the entire BLA process, including the 

contents and format of a “completed” BLA, which included clinical datasets. 

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39. The FDA further advised CytoDyn and Amarex at the meeting that this “data 

should be robust and FDA should not be put in a position to try to summarize or make 

assumptions about this data.”  

40. In the months after the pre-BLA meeting, Pourhassan repeatedly set unrealistic 

internal deadlines concerning CytoDyn’s BLA submission.  Pourhassan then caused the 

company to make materially false and misleading public statements that suggested these 

deadlines were realistic (when they were not). 

41. For example, before the market opened on November 13, 2018, CytoDyn issued a 

materially false and misleading press release concerning its BLA submission timeline. 

42. In that press release, CytoDyn stated that it “remains on track to complete its 

filing of a [BLA] for PRO 140 as a combination therapy for HIV patients with the FDA by the 

first quarter of 2019.”  

43. In reality, as Pourhassan knew at the time, this timeline was impossible to meet 

based on the progress of the company’s clinical trials.   

44. Pourhassan reviewed and approved this press release before it was issued. 

45. After CytoDyn issued this release on November 13, 2018, its stock opened up 5% 

at $0.59 and the trading volume that day was approximately 279,400 shares—more than double 

the volume the prior day and nearly double the volume the following day. 

46. The November 13, 2018, press release also stated that CytoDyn’s clinical trial had 

shown HIV viral load suppression at a “92% Responder Rate” when the tested dosage of PRO 

140 was increased from 350 milligrams to 700 milligrams. 

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47. During a teleconference on December 14, 2018, between the FDA, CytoDyn 

(including Pourhassan), and Amarex (including Kazempour), the FDA stated that it had not seen 

the study data to validate this information. 

48. Additionally, on December 28, 2018, the FDA sent a memorandum to Kazempour 

in which it raised concerns about an “overly optimistic timeline for your BLA submission” given 

CytoDyn’s request to allow amendments to its ongoing clinical trials to collect at least 12 weeks 

of data from at least 100 subjects receiving the higher 700 milligram dosage. 

49. The memorandum reminded CytoDyn of the information it needed to submit with 

its BLA submission, which included clinical datasets.   

50. The memorandum also raised questions about how the “92% Responder Rate” 

was calculated and asked for more data before the FDA could agree to permit the increased 

dosage to be used for all subjects. 

51. On January 3, 2019, Kazempour responded to the FDA thanking them for the 

feedback and the summary of the information to be included in their BLA submission.  

III. AS CYTODYN FAILS TO FILE ITS BLA IN 2019 AND EARLY 2020, 
POURHASSAN GROWS CONCERNED ABOUT THE STOCK PRICE IMPACT. 

52. 2019 came and went without CytoDyn filing its BLA. 

53. Throughout 2019, CytoDyn (through Kazempour and Amarex) and the FDA were 

in communication regarding information and data that would be necessary in order for CytoDyn 

to file a completed BLA. 

54. For example, on December 16, 2019, the FDA sent a memorandum to Kazempour 

in which it stated that, “[w]ith your BLA submission, you should submit an integrated 

assessment and detailed summary that supports your selected dose and incorporates virologic 

outcomes, safety data (including laboratory abnormalities), exposure related data (including 

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population pharmacokinetics and exposure response relationship analyses), receptor occupancy 

data (including both method validation report and bioanalytical report of clinical samples), and 

anti-idiotypic antibody data (including both method validation report and bioanalytical report of 

clinical samples).” 

55. The memorandum again reminded Kazempour that “the data you submit with 

your BLA must be sufficiently complete and accurate to allow FDA reviewed to evaluate your 

selected dose.”  

56. At this time, Pourhassan sought to tie his own compensation to the BLA filing. 

57. On December 19, 2019, Pourhassan sought and obtained approval from 

CytoDyn’s board to award him (and others) stock options that would vest upon the filing of the 

company’s BLA submission. 

58. Specifically, Pourhassan received a stock option award of 2,000,000 shares of 

CytoDyn common stock, with an exercise price of $0.63, which would automatically vest upon 

the filing of the BLA submission. 

59. Pourhassan’s unrealistic expectations and deadlines put pressure on both CytoDyn 

and Amarex employees. 

60. For example, CytoDyn Employee-1 was working their team seven days a week to 

try to meet Pourhassan’s deadlines. 

61. Amarex Employee-1 viewed CytoDyn as a “pushy” client that routinely set 

unreasonable turnaround times for various deliverables. 

62. In late December 2019, Pourhassan set a January 2020 deadline for CytoDyn to 

make its BLA submission. 

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63. But, by January 2020, there were a number of deliverables necessary for the BLA 

submission still pending.   

64. In mid-January 2020, Amarex Employee-2 told Pourhassan that it was not 

possible to submit the BLA by the end of the month. 

65. Nevertheless, in a text message on January 29, 2020, Pourhassan asked Amarex 

Employee-2 whether CytoDyn could file its BLA submission the next day. 

66. Pourhassan was concerned that CytoDyn’s BLA filing delays were negatively 

impacting the company’s stock price. 

67. For example, in a text message on February 8, 2020, Pourhassan told Kazempour 

and Amarex Employee-2 that “We told the public on Thursday that the BLA is delayed until the 

end of February and on Thursday and Friday our stock dropped and our market cap went down 

by $200 million and everyone is asking for my head.  If we can’t get BLA done by the end of 

February we will have another tremendous drop in our stock.” 

68. And, in a text message on February 24, 2020, Pourhassan told Kazempour that he 

was “really in need of your help with our BLA.  We signed an extra work order of about $150k 

so we could get it done by the end of JANUARY and now we are at the end of FEBRUARY and 

I am losing a lot of credibility among our shareholders.” 

69. In or about early 2020, Pourhassan asked a CytoDyn consultant for certain data 

(i.e., receptor occupancy data) required for inclusion in the clinical module for the BLA.  The 

CytoDyn consultant shared with Pourhassan a spreadsheet that indicated that the consultant did 

not even have the samples needed to generate that data, let alone the data itself. 

 

 

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IV. POURHASSAN CAUSES CYTODYN TO ISSUE A PRESS RELEASE FALSELY 
STATING THAT IT HAD FILED A “COMPLETED” BLA SUBMISSION. 

70. By the beginning of April 2020, after already missing various deadlines set by 

Pourhassan, Amarex was still seeking to complete the clinical datasets that were needed for the 

BLA submission. 

71. Knowing these clinical datasets were not complete, Pourhassan asked CytoDyn 

Employee-1 and Amarex Employee-2 in an email on April 6, 2020, “if we can file both sections 

of BLA (CMC and Clinical) no later than April 15 and if we do what will we be risking?” 

72. Then, on April 14, 2020, Pourhassan emailed Kazempour along with CytoDyn 

Employee-1 and Amarex Employee-2, complaining that CytoDyn’s stock had dropped “in 1 hour 

almost 20%” despite the company having released what Pourhassan described as “great results 

about COVID-19 patients.” 

73. During this time period in 2020, CytoDyn had also initiated clinical studies to 

determine if leronlimab could be used to treat COVID-19. 

74. Pourhassan further stated in his April 14, 2020, email that “[t]his drop will be 

much deeper if we don’t file our BLA as the [stock] message board now is getting bombarded by 

investors who are very frustrated with me and CytoDyn.” 

75. Accordingly, Pourhassan directed the recipients of his email to “file the BLA no 

later than next week Wednesday, even if we are short in no matter what portion of whatever it is 

that we are short.”  

76. Pourhassan further stated in his email that, if CytoDyn’s stock price continued to 

drop, the company would have “problems financing itself” and that, as a result “THE MOST 

IMPORTANT thing now is BLA.  Please focus on that urgently only.” 

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77. In response to Pourhassan’s instruction, Amarex filed CytoDyn’s BLA with the 

FDA approximately two weeks later on April 27, 2020. 

78. Kazempour electronically signed the cover letter for the BLA submission, which 

was on CytoDyn letterhead, as the “US Agent for CytoDyn, Inc.” 

79. Kazempour’s BLA cover letter made clear that the BLA submission was missing 

certain datasets and was otherwise not complete.  The letter further stated that “[r]evised datasets 

will be submitted to the BLA as an amendment in May 2020,” noting the missing datasets in a 

table below in red font. 

80. Kazempour applied his electronic signature to the BLA cover letter on Sunday, 

April 26, 2020, the day before the BLA filing itself. 

81. The deficiencies in CytoDyn’s BLA submission were not trivial; the submission 

was missing clinical datasets that the FDA had repeatedly reminded Kazempour, Amarex, 

Pourhassan, and CytoDyn were core to the FDA’s substantive review process. 

82. As Kazempour himself stated in a declaration he signed in a private litigation 

between Amarex and CytoDyn, despite repeated warnings, “Pourhassan directed Amarex to file 

the BLA prematurely, knowing it was incomplete, lacking in appropriate content, and not ready 

for submission.” 

83. Citing Pourhassan’s April 14, 2020, email, Kazempour further stated in this 

declaration that Pourhassan’s “justification for his premature direction, as stated in his email, 

stems from a stock price drop and to ‘allay investors who are very frustrated with me and 

CytoDyn.’” 

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84. Kazempour also stated in his declaration that, at Pourhassan’s direction, “Amarex 

submitted the incomplete and lacking BLA to the FDA,” which was “[n]ot surprisingly” rejected 

as incomplete.   

85. Kazempour further admitted in this declaration that “Pourhassan and CytoDyn 

received exactly what was to be expected, a refusal to file [letter from the FDA] for missing and 

incomplete information.” 

86. On April 27, 2020, CytoDyn issued a press release touting its BLA submission 

before the market opened that day. 

87. Specifically, the title of the press release stated that CytoDyn had submitted a 

“completed” BLA to the FDA for leronlimab as a combination therapy for HIV. 

88. The press release further stated that CytoDyn “has submitted the clinical, and the 

CMC (chemistry, manufacturing and controls) portions of its BLA” to the FDA. 

89. Pourhassan himself was quoted in the press release, saying “The submission of 

the final two parts of the BLA is a significant milestone for the Company, and initiates its 

transition from a development-stage company to a commercial organization.” 

90. In reality, as Pourhassan knew, CytoDyn’s BLA submission was not complete. 

91. As the cover letter signed by Kazempour acknowledged, the BLA did not contain 

all the information the FDA had previously requested in order to substantively review the 

submission.  

92. Among other deficiencies, the BLA submission lacked required clinical datasets 

that the FDA had previously advised CytoDyn and Amarex were required for a completed 

submission.  

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93. Pourhassan directed CytoDyn employees to prepare the April 27, 2020, press 

release that touted the submission of a completed BLA, he reviewed drafts and made edits to the 

release, and he authorized CytoDyn to issue the release. 

94. Based on his prior communications with Pourhassan, Kazempour knew or was 

reckless as to whether Pourhassan would issue a press release stating that CytoDyn had filed a 

completed BLA when, in fact, it had not. 

95. Pourhassan convinced CytoDyn’s board of directors to award Kazempour 

warrants to purchase an additional 200,000 shares of CytoDyn stock as a reward for 

Kazempour’s work in helping to file the (incomplete) BLA submission.   

96. On April 24, 2020, Pourhassan texted Kazempour to let him know that CytoDyn’s 

board had approved the issuance of these warrants.   

97. Kazempour later texted Pourhassan and asked him to put the warrants in 

Kazempour’s wife’s name. 

98. On April 27, 2020, after CytoDyn issued this press release, CytoDyn’s stock price 

closed up over 17% on 80% increased trading volume. 

V. THE FDA REBUKES CYTODYN FOR ITS FALSE BLA PRESS RELEASE. 

99. The FDA’s response to CytoDyn’s false press release lauding its filing of a 

completed BLA submission was swift. 

100. On April 29, 2020, a senior regulatory project manager at the FDA emailed 

Kazempour with the subject line “BLA 761144 – Remains Incomplete” and sent the email with 

“High” importance.  

101. In the email, the FDA official stated that CytoDyn’s submission included an 

“incomplete clinical module to support this BLA application” and specifically took issue with 

the use of the word “completed” in the title of CytoDyn’s press release on April 27, 2020. 

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102. The FDA official also stated in the email that the FDA had informed CytoDyn on 

multiple occasions, including by providing them with links to guidance, “that the BLA review 

clock does not begin until a complete BLA was submitted.” 

103. The FDA official further stated in the email that CytoDyn’s “April 27, 2020, 

submissions do not constitute a completed BLA as CytoDyn has reported to the public via press 

release,” and that “[t]he BLA application is not considered complete as you yourself 

acknowledged in your covering letter with the April 27, 2020, submission – noting that the 

clinical datasets remain outstanding.” 

104. The FDA official further requested that Kazempour, as CytoDyn’s regulatory 

agent, “take regulatory responsibility for the misinformation released in the aforementioned 

Press Release by notifying CytoDyn.” 

105. Amarex Employee-2 forwarded the FDA official’s email to Pourhassan the next 

day, April 30, 2020, at approximately 5:30 p.m. ET. 

106. By then, as described in more detail below, Pourhassan had already begun 

exercising vested stock options and selling CytoDyn shares.  

107. On May 4, 2020, CytoDyn issued a press release concerning the possible use of 

leronlimab for the treatment of COVID-19.  The release was titled:  “FDA Approves 54 

Emergency INDs for Leronlimab Treatment of Coronavirus – CytoDyn Requests Compassionate 

Use from FDA for COVID.” 

108. In the middle of the eighth paragraph in that press release, CytoDyn stated that its 

BLA submission (concerning the possible use of leronlimab for the treatment of HIV) “will be 

considered completed after the clinical datasets are submitted on May 11, 2020,” and conceding 

that the April 27, 2020, BLA submission had not, in fact, been considered complete by the FDA. 

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109. Pourhassan reviewed and approved the issuance of this press release by CytoDyn. 

110. On May 13, 2020, CytoDyn issued another press release concerning its BLA 

submission, which stated that the company had completed the submission of all remaining parts 

on May 11, 2020. 

111. Pourhassan reviewed and approved the issuance of this press release by CytoDyn. 

112. Again, however, and as Pourhassan well knew, CytoDyn’s May 11, 2020, BLA 

submission was not complete because it did not (and could not have) included the required 

information, data, and analysis. 

113. On July 8, 2020, the FDA sent Kazempour, as the regulatory agent for CytoDyn, a 

Refuse to File letter for the May 11, 2020, BLA submission. 

114. The notice stated that the BLA submission by CytoDyn on May 11, 2020, “does 

not contain all pertinent information and data needed to complete a substantive review.” 

115. The notice summarized four sets of deficiencies in the BLA:  “Absence of 

Analyses of Data Supporting the Proposed Dose, “Electronic Dataset Quality Issues,” “Absence 

of Demographic Subset Analyses Needed for Substantive Review of Product Effectiveness and 

Safety,” and “Device-Related Issues.” 

116. CytoDyn never filed a completed BLA submission with the FDA. 

117. On October 28, 2022, CytoDyn announced in a press release that it was 

withdrawing its BLA, citing issues “related to the quality of data collection and monitoring of the 

pivotal clinical trials by the clinical research organization [ ] contracted to manage the trials.” 

VI. POURHASSAN SELLS MILLIONS OF DOLLARS OF CYTODYN STOCK 
WHILE IN POSSESSION OF MATERIAL NONPUBLIC INFORMATION 
ABOUT CYTODYN’S BLA SUBMISSION. 

118. At all relevant times, CytoDyn had a policy that prohibited insider trading by all 

of its officers, directors, and employees (the “Insider Trading Policy”). 

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119. Specifically, the Insider Trading Policy prohibited all of CytoDyn officers, 

directors, and employees who are aware of material nonpublic information related to CytoDyn 

from engaging in transactions in the securities of CytoDyn. 

120. Among other transactions, the Insider Trading Policy expressly covered the sale 

of CytoDyn common stock. 

121. The Insider Trading Policy applied to Pourhassan, who was both an officer and 

director of CytoDyn. 

122. The Insider Trading Policy stated that material information is “information for 

which there is a substantial likelihood that a reasonable investor would consider such 

information important in making his or her investment decisions, or information that could be 

reasonably expected to affect the price of a company’s securities, whether it is positive or 

negative.” 

123. The Insider Trading Policy further stated that “nonpublic” information is 

“information which has not been made available to investors generally.” 

124. The Insider Trading Policy warned that the penalties for the purchase or sale of 

CytoDyn securities while aware of material nonpublic information are “severe” and include 

“substantial jail terms,” “disgorgement of profits,” “fines for the person who committed the 

violation of several times the profit gained or loss avoided, whether or not the person actually 

benefited,” and “orders barring individual from serving as a director or officer of a public 

company.” 

125. Between April 30, 2020, and May 4, 2020, Pourhassan sold $15,760,909.87 worth 

of CytoDyn stock, the vast majority of which he acquired through the exercise of vested stock 

options. 

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126. When he sold this stock, Pourhassan knew that CytoDyn’s BLA submission, 

which a press release had trumpeted as “complete,” was not complete and, in fact, was missing 

key clinical datasets.  

127. Over the course of just three trading days, Pourhassan sought to, and did, sell the 

maximum number of shares that he was permitted to sell in a three-month period pursuant to the 

volume limitations for sales by affiliates (like Pourhassan) of an issuer (like CytoDyn).  These 

volume limitations are contained in Commission Rule 144(e) [17 C.F.R. § 230.144(e)]. 

128. In order to exercise these options, Pourhassan signed 12 option exercise forms.   

129. Pourhassan confirmed in each such form that his sales of the shares he was to 

acquire by exercising these options would comply with the Insider Trading Policy. 

130. Pourhassan also signed a Form 144 for the stock he sold on April 30, 2020.  In it, 

Pourhassan certified that he was not in possession of material nonpublic information. 

131. By at least April 23, 2020, Pourhassan caused others at CytoDyn to prepare the 

paperwork that would enable him to exercise these options and place these trades. 

132. Pourhassan began discussing his planned options exercise with his brokers on or 

about April 28, 2020.  

133. On April 30, 2020, Pourhassan exercised 11 sets of options to acquire 5,381,167 

shares of CytoDyn stock, which represented a nearly 1,700% increase in his holdings of 

CytoDyn stock. 

134. One of the options that Pourhassan exercised on April 30, 2020, was for the 

2,000,000 shares with an exercise price of $0.63 that he received in December 2019 and which 

had just vested upon the filing of the BLA submission three days before.  

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135. The same day, Pourhassan sold 2,219,837 shares of CytoDyn stock for proceeds 

of $7,838,688.41. 

136. On May 1, 2020, Pourhassan sold an additional 1,399,685 shares of CytoDyn 

stock for proceeds of $4,569,131.71. 

137. The following Monday, May 4, 2020, Pourhassan exercised an additional option 

to acquire 30,933 shares of CytoDyn stock. 

138. The same day, Pourhassan sold 1,201,652 shares of CytoDyn stock for proceeds 

of $3,353,089.74. 

139. Of the approximately $15.8 million that Pourhassan’s sales of CytoDyn stock 

generated, he paid a total of approximately $11 million back to CytoDyn—$3,792,058.00 to pay 

the exercise prices of the options and $7,247,450.63 in tax payments. 

140. Accordingly, Pourhassan netted a profit of $4,721,401.24 on these sales. 

VII. KAZEMPOUR SELLS HUNDREDS OF THOUSANDS OF DOLLARS OF 
CYTODYN STOCK BEFORE THE FDA’S REFUSE TO FILE LETTER. 

141. On April 28, 2020, the day after CytoDyn issued its materially false press release 

concerning a “completed” BLA submission, Kazempour emailed CytoDyn’s chief financial 

officer and indicated that he wanted to exercise a previously-issued warrant so that he could 

obtain and sell 150,000 shares of CytoDyn common stock. 

142. Kazempour followed up with another email to CytoDyn’s chief financial officer 

on May 15, 2020, asking if Kazempour could pay the exercise price for those 150,000 warrant 

shares. 

143. Thereafter, Kazempour paid CytoDyn $84,750 to obtain the shares (i.e., an 

exercise price of $0.565 per share) and deposited the shares into his brokerage account. 

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144. On June 9 and 10, 2020, Kazempour sold these 150,000 shares of CytoDyn stock 

for total proceeds of $427,475.67. 

145. Accordingly, Kazempour received a pre-tax profit of $342,725.67 from his sales 

of these shares. 

146. At the time of these sales, Kazempour knew that the BLA submission he had filed 

was not complete and expected the FDA to issue a Refuse to File letter, which it ultimately did a 

month later.  

VIII. CYTODYN AND POURHASSAN MAKE ADDITIONAL MATERIALLY FALSE 
AND MISLEADING STATEMENTS ABOUT COVID-19 TRIALS IN 2021. 

147. In addition to the press releases Pourhassan caused CytoDyn to issue concerning 

its BLA submission for the use of leronlimab as a possible treatment for HIV, Pourhassan also 

was responsible for materially false and misleading statements related to the company’s clinical 

trials for the use of leronlimab as a possible treatment for COVID-19. 

148. CytoDyn obtained permission from the FDA to conduct clinical trials to treat 

COVID-19 in early 2020.  Amarex conducted those trials.  

149. In or about January 2021 CytoDyn obtained the results from one of its clinical 

trial, which was called the “CD12 Trial.”   

150. The CD12 Trial did not meet any of its primary or secondary “endpoints”—that 

is, the specific objectives of the trial identified before its initiation.   

151. Though companies typically prepare lengthy reports to the FDA concerning 

clinical trial results, CytoDyn prepared and submitted to the FDA an “executive summary” of the 

CD12 Trial on February 16, 2021. 

152. At Pourhassan’s direction, Amarex included “subgroup” analysis in the executive 

summary—that is, analysis of smaller groups of subjects as opposed to the full trial group—in 

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order to make the results of the CD12 Trial sound better than they were.  CytoDyn Employee-2 

was pressured to include this information by Pourhassan. 

153. On February 18 and 25, 2021, the FDA sent letters to CytoDyn Employee-2 

stating that it did not agree with CytoDyn’s conclusions related to the benefits of leronlimab for 

the treatment of COVID-19 patients based on its subgroup analysis. 

154. Nevertheless, on March 8, 2021, CytoDyn publicly announced the results of the 

CD12 Trial by emphasizing the same subgroup analysis that had been rejected by the FDA. 

155. Further, at Pourhassan’s direction, on March 8 and March 30, 2021, CytoDyn 

issued press releases that suggested that the CD12 Trial had demonstrated that leronlimab 

decreased mortality for severe-to-critically ill patients with COVID-19 through the use of this 

same subgroup analysis. 

156. In reality, as Pourhassan knew from CytoDyn Employee-2 and the FDA’s 

correspondence, the CD12 Trial had not met its key endpoints, which made touting subgroup 

analysis, which was not the point of the trial, misleading. 

157. Pourhassan reviewed and approved the issuance of these press releases by 

CytoDyn. 

158. CytoDyn issued both March 2021 press releases before the markets opened each 

day and the releases resulted in significantly higher trading volume. 

159. On March 8, 2021, the trading volume that day was approximately 21,383,800 

shares, or 460% higher than the trading volume the prior trading day. 

160. On March 30, 2021, the trading volume was approximately 10,878,600 shares, or 

330% higher than the trading volume the prior trading day.  

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161. On April 14, 2021, CytoDyn filed a Form 10-Q with the Commission that stated 

that the results of the CD12 Trial were reported in the Form 8-K it had filed on March 8, 2021. 

162. Ultimately, on May 17, 2021, the FDA put out a public statement about 

leronlimab in order to correct the misleading information in CytoDyn’s press releases. 

163. In that statement, the FDA clarified that, based on these same clinical trials, “it 

has become clear that the data currently available do not support the clinical benefit of 

leronlimab for the treatment of COVID-19.”   

164. The FDA further explained in its statement that CytoDyn’s press releases had 

communicated differences in “small subgroups” from the CD12 trial, which has “well-

established limitations, especially in the context of a clinical trial that has failed to show a benefit 

in the overall study population.” 

165. In addition to causing CytoDyn to issue false and misleading press releases, 

Pourhassan participated in video “interviews” by a company called Proactive Media.   

166. Proactive Media describes itself as a “financial media portal” that provides news, 

commentary, and analysis on hundreds of public and private companies. 

167. Pourhassan retained Proactive Media on behalf of CytoDyn and CytoDyn paid 

Proactive Media at least $25,000 for its services. 

168. For each of these “interviews,” Pourhassan would provide a script to the 

interviewer with questions to ask and talking points from recent CytoDyn press releases.  

Pourhassan would then use the video as a way to promote CytoDyn’s stock to investors or 

potential investors. 

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169. These videos were posted both on Proactive Media’s website and on its channel 

on YouTube.com.  Certain of the videos, including the video described below, were also made 

available via hyperlink from CytoDyn’s corporate website. 

170. In one of these videos, which was posted on or about September 22, 2021, 

Pourhassan made a number of misleading statements that suggested leronlimab had been 

established as safe and effective for the treatment of COVID-19.  For example, Pourhassan stated 

the following in the video: 

a. “In the United States, we did a trial of 394 patients which included severe 

and critically ill population. In the critically-ill population, our results were really strong.” 

b. “Our critically-ill population that we did in the United States when we 

gave a dose of leronlimab, the survival rate was 78%.  Once we gave them another dose, the 

survival rate went up to 82%.” 

c. “Imagine, if 78% went to 82, the next one would be maybe 88, and then 

95. I am making up numbers, but if it goes to that kind of numbers, if it just follows the same 

pattern what we learned, this is going to be the most fantastic results anybody could ever 

imagined to have. Now I’m not saying that’s what we’re going to get, but I’m saying that’s what 

the results are showing.” 

d. “The primary endpoint . . . is the discharge, the rate of patients who get on 

ventilator and get discharged.  That endpoint was 166% better in our trial that we did in the 

United States versus placebo.  166%.” 

171. In reality, as Pourhassan well knew, he had again mischaracterized CytoDyn’s 

COVID-19 clinical trials, which the FDA had previously told him and the public just four 

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months earlier (in its statement on May 17, 2021) “do not support the clinical benefit of 

leronlimab for the treatment of COVID-19.” 

172. On February 11, 2022, the FDA issued a warning letter to CytoDyn about this 

video. 

173. In the letter, the FDA stated that the September 2021 video “represents in a 

promotional context that leronlimab, an investigational new drug, is safe and effective for the 

purpose for which it is being investigated or otherwise promotes the drug.” 

174. The FDA concluded that, “[a]s a result, leronlimab is misbranded under section 

502(f)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and is in violation of section 

301(a) of the FD&C Act.” 

175. The FDA further advised that “the video is concerning from a public health 

perspective because it suggests that leronlimab provides a clinical benefit to individuals with 

[COVID-19],” despite the fact that it “has not been approved or authorized by the FDA and 

whose safety and efficacy has not yet been established.” 

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a) 

(Pourhassan and Kazempour) 
 

176. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 175. 

177. Defendants, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or the mails, (i) knowingly or recklessly have employed one or more 

devices, schemes or artifices to defraud, (ii) knowingly, recklessly, or negligently have obtained 

money or property by means of one or more untrue statements of a material fact or omissions of 

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a material fact necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading, and/or (iii) knowingly, recklessly, or negligently 

have engaged in one or more transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon the purchaser. 

178. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. 

§ 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

(Pourhassan) 
 

179. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 175. 

180. Pourhassan, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly has (i) employed one or more devices, schemes, or artifices to defraud, (ii) made one 

or more untrue statements of a material fact or omitted to state one or more material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (iii) engaged in one or more acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

181. By reason of the foregoing, Pourhassan, directly or indirectly, singly or in concert, 

has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

 

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THIRD CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder 

(Kazempour) 
 

182. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 175. 

183. Kazempour, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly has (i) employed one or more devices, schemes, or artifices to defraud, and/or (ii) 

engaged in one or more acts, practices, or courses of business which operated or would operate 

as a fraud or deceit upon other persons. 

184. By reason of the foregoing, Kazempour, directly or indirectly, singly or in 

concert, has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 

U.S.C. § 78j(b)] and Rules 10b-5(a) and 10b-5(c) thereunder [17 C.F.R. §§ 240.10b-5(a) and 

240.10b-5(c)]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Defendant Pourhassan, his agents, servants, employees, and 

attorneys and all persons in active concert or participation with any of them from violating, 

directly or indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

 

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II. 

Permanently enjoining Defendant Kazempour, his agents, servants, employees, and 

attorneys and all persons in active concert or participation with any of them from violating, 

directly or indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and 10b-5(c) thereunder [17 C.F.R. 

§§ 240.10b-5(a) and 240.10b-5(c)]; 

III. 

Ordering Defendants to disgorge all ill-gotten gains they received directly or indirectly, 

with prejudgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act 

Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5), and 78u(d)(7)];  

IV. 

Ordering Defendants to pay civil monetary penalties under Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];  

V. 

Ordering Pourhassan to pay a civil money penalty pursuant to Exchange Act 21A(a) [15 

U.S.C. § 78u-1(a)]; 

VI. 

Permanently prohibiting Defendants from serving as an officer or director of any 

company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 

78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], 

pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) 

[15 U.S.C. § 78u(d)(2)]; 

 

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VII. 

Granting any other and further relief this Court may deem just and proper. 

 
Dated: New York, New York 
 December 20, 2022 

 

/s/ Thomas P. Smith, Jr.      

THOMAS P. SMITH, JR. 
CO-ACTING REGIONAL DIRECTOR  
Sheldon L. Pollock 
Adam S. Grace 
Lee A. Greenwood 
Howard Kim 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004 
212-336-1060 (Greenwood) 
[email protected]    

 

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