Judge Grants Class Certification Over False Claims by Radient Pharmaceuticals

Posted on: December 4th, 2012 by Nadine Gartner

A federal judge in the Central District of California has certified a class of investors in a pending securities fraud lawsuit against Radient Pharmaceuticals.  Judge David O. Carter held that the plaintiffs, who claim they are defrauded investors, are entitled to class action status.

At the time of the alleged offense, Radient’s main business comprised the research, development, manufacturing and sale of Onko-Sure, a government-approved in vitro cancer test.  In 2010, Radient reported revenue of $232,000, operating expenses of more than $14 million, and a net loss of $86 million.

According to the plaintiffs, the company needed a cash infusion when executives issued a press release on January 18, 2011, claiming that Radient had entered a clinical trials agreement with the prestigious Mayo Clinic.  That assertion allegedly helped raise private placements of $8.4 million for the company.

Plaintiffs further claim that the press release was false and misleading because Radient had no meaningful partnership agreement with the Mayo Clinic and no joint studies were planned.  Problems with the press release came to light in March 2011, and Radient’s stock dropped by twenty-one percent.