DOJ probes trading in herbal medicine firm that surged 46,000%
[WASHINGTON] The US Department of Justice (DOJ) is probing market volatility at a Hong-Kong based traditional Chinese medicine company after a stock surge briefly made its value soar 46,000 per cent.
The DOJ sent a subpoena to Regencell Bioscience to turn over documents and communications concerning trading in the company’s shares “and other corporate operational, financial and accounting matters”, according to the company’s financial report filed with the US Securities and Exchange Commission on Friday (Oct 31) in Washington.
“We are cooperating with this investigation, but we cannot predict its ultimate resolution,” the filing states. Company representatives didn’t immediately respond to a request for comment sent after business hours on Friday. A spokesperson for DOJ also didn’t immediately respond to a request for comment.
Regencell made headlines in June when its stock price soared despite no apparent news from the company, which markets and licenses traditional treatments for ADHD and autism spectrum disorder. The rally briefly vaulted its chief executive officer’s net worth to among the world’s largest fortunes.
The firm, which debuted on the Nasdaq Capital Market in 2021, is in the research and development stage and has not generated any revenue in any years since, according to its filing.
“We have no saleable products and have not generated any revenue from product sales,” it states.
The company addressed the volatility in its securities filing. “We believe this volatility may be caused in substantial part by a ‘short squeeze’ or other anomalous trading activity causing demand for, and price of, our ordinary shares to increase,” it said. BLOOMBERG
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