SEC Sues Revolutions Medical for Sham Press Releases
The Securities and Exchange Commission filed a civil injunctive action charging Revolutions Medical Corp. a medical device company based in Charleston, South Carolina, and the company’s CEO, Rondald L. Wheet with fraudulently issuing false and misleading press releases concerning the company’s flagship product, a retractable, medical safety syringe.
Between approximately August 2010 and July 2011, Revolutions Medical and Wheet issued a series of misleading press releases that contained statements purporting that Revolutions Medical had finalized the development of a safe and effective syringe, the syringe was slated for imminent mass manufacturing and commercial distribution, and Revolutions Medical had entered into, or was on the cusp of entering into, binding mass sales and distribution agreements, including a sales agreement with the U.S. Department of Defense.
However, contrary to the statements made in the company’s press releases, Revolutions Medical had not developed a safe and effective syringe ready for mass manufacturing or commercial distribution, and had not entered into any binding agreements for the sale and distribution of such a final product.
The Complaint further alleges that, through the press releases, Revolutions Medical and Wheet artificially inflated the price of Revolutions Medical’s shares, and that Revolutions Medical sold shares to a third-party hedge fund at inflated prices.