The Securities and Exchange Commission announced its first fraud charges Tuesday against a firm for a COVID-19 related scam.
According to the SEC complaint, microcap issuer Praxsyn Corp. and its CEO, Frank Brady, issued false and misleading press releases claiming Praxsyn was able to acquire and supply large quantities of N95 or similar masks to protect wearers from the novel coronavirus.
The SEC has brought COVID-19 related trading suspensions, but the case against Praxsyn is the first fraud charge.
The SEC issued an order on March 26 temporarily suspending trading in the securities of Praxsyn.
Praxsyn, which is purportedly based in West Palm Beach, Florida, issued a press release on Feb. 27 stating that it was negotiating the sale of millions of N95 masks and “evaluating multiple orders and vetting various suppliers in order to guarantee a supply chain that can deliver millions of masks on a timely schedule.”
On March 4, Praxsyn issued another press release claiming it had a large number of N95 masks on hand and had created a “direct pipeline from manufacturers and suppliers to buyers” of the masks.