December 11, 2017

Immunosyn Corporation and Execs Charged by SEC

Immunosyn Corporation, three shareholder companies and four of their senior executives, have been charged by the Securities and Exchange Commission with fraudulently misleading investors.


It is alleged that in various public filings between 2006-2010, the California-based biopharmaceutical company stated that Argyll Biotechnologies LLC, its controlling shareholder, either planned to or had commenced the US regulatory approval process for human clinical trials for SF-1019.

SF-1019 is a drug derived from goat blood that is intended to treat various ailments. What Immunosyn did not disclose was that the FDA had put a hold on the drug applications for SF-1019, preventing clinical trials from happening. In addition, it is alleged that Immunosyn stated that approval for human clinical trials was imminent or underway in Europe, when in fact an application had never been submitted.

The SEC’s complaint, which was filed on 1st August in federal court in Chicago, alleges that Douglas McClain Jr., Immunosyn’s CFO, Douglas McClain Sr., Argyll’s Chief Scientific Officer, and James Micelli, Argyll’s CEO, raised approximately $20 million through insider trading, by selling Immunosyn shares while knowing that they were misrepresenting the status of SF-1019. The majority of shares were sold through Argyll Equities, owned jointly by McClain Jr. and Micelli, and Padmore Holdings Ltd, an offshore company owned by McClain Sr., McClain Jr., and Micelli. Also charged with securities fraud is the CEO of Immunosyn, Stephen D. Ferrone.

The SEC alleges that a video on Immunosyn’s website showed McClain Sr. making misstatements about the regulatory approval status of SF-1019. In addition, he sold Immunosyn stock to patients at a Texas holistic clinic, some of them terminally ill. Allegedly, he raised about $300,000 from the patients, but they never received their shares.

The SEC is seeking a final judgement that forbids the defendants from future violations of the anti-fraud provisions of the federal securities laws, with each defendant returning any money they have made, and paying financial penalties. They also seek to bar McClain Sr., McClain Jr., Micelli and Ferrone from serving as a director or officer of a public company.

The investigation was led by Tracy Lo, John Kusutusch and Eric Phillips from the SEC’s Chicago Office, with the assistance of the Food and Drug Administration. Ms. Lo and Mr. Phillips will handle the litigation.

Read more:
SEC.gov
Goat Blood HIV Cure said to be $20 Million Scam
Charges of Fraud Hit Pharma Company, Execs
SEC lays out “Tall tales” in $20M biotech securities scam
SF-1019 Immunosyn


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