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Woman sues biotech company, alleging securities fraud

By Molly English-Bowers | Sep 29, 2015

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A woman is suing a Massachusetts biotech company, alleging it violated federal securities laws.

Nicole O'Connell, on behalf of herself and others similarly situated, filed a lawsuit Sept. 11 in U.S. District Court Southern District of New York against Cellceutix Corporation of Beverly, Mass., Leo Ehrlich and Krishna Menon.

According to the complaint, Menon is one of the co-founders of the company and served as the company's president and director, and Erhlich is one of the co-founders and served as chief executive officer, chairman of the board and chief financial officer. Cellceutix is a biotechnology company focused on discovering drugs for hard-to-treat diseases such as cancer.

The suit says O'Connell purchased Cellceutix securities between May 10, 2013, and August 6, 2015. The drugs kevetrin and brilacidin are both owned by Cellceutix and both are undergoing clinical studies, the suit says.

O'Connell alleges throughout the class period, the defendants made false and misleading statements as well as failed to disclose adverse facts about the company, specifically that they knew the drugs are not effective but they never admitted as such.

The plaintiff, who purchased Cellceutix securities, says she was damaged financially when those falsehoods were discovered.

O'Connell seeks a jury trial, determination this suit is a class action, payment of damages, attorney fees and court costs, plus other relief the court may deem appropriate. She is represented by attorneys Phillip Kim and Laurence M. Rosen of The Rosen Law Firm in New York.

U.S. District Court Southern District of New York case number 1:15-cv-07194-KPF.

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The Rosen Law Firm