For those of you who haven’t seen this:
SEC vs. DECN (author @first)
1. Senior Counsel submits report in compliance with request for “all information” SEC had before it on April 23, 2020 when it suspended trading in DECN stock.
2. Opening salvo is a rhetorical device designed to discredit Keith Berman: “. . . was fired amid reports of unexpected losses” . . . “described as ‘cavalier about everything’” and “Allegations . . . included misleading information . . . as well as false press releases.” Was Berman guilty of anything, personally? The Senior Counsel leaves it to you to assume.
3. In item 12, The Senior Counsel again uses rhetoric to incline the reader, noting that Berman issued several press releases in January and February 2020 (normal business practices) “and just weeks later issued a press release” regarding the COVID test kit” (italics mine). Since when does the timing of a PR constitute improper activity?
4. In item 12, The Senior Counsel writes a very misleading statement: “Between March 3, 2020 and April 7, 2020, DECN issued eleven press releases claiming to have ‘technology perfected’ to allow it to manufacture and sell a “revolutionary” COVID-19 test kit that would provide results “in 15 seconds based on a small finger prick blood sample.” This is completely untrue. In only 3 of those press releases was ‘perfected technology’ even mentioned. I have repeatedly documented this elsewhere.
5. Item 14 includes this: “ . . . DECN began to issue a series of apparently false and misleading press releases . . .” (italics mine) - uh, Senior Counsel, if you thought they were only apparently false and misleading, why did the SEC suspend the company?
6. The information contained in #14 is what Berman wrote in PRs. Again, another rhetorical device: The Senior Counsel wants you to believe Berman is guilty by association – by placing the information that he labelled “apparently misleading” next to the label “apparently misleading” he wants you to assume it is . . . . well, misleading, which is of course The Senior Counsel being . . misleading.
7. On March 11, Berman wrote that he “anticipated the sale of 420,000,000 kits in the first full year of commercial sale.” The Senior Counsel noted that Berman stated that DECN “expected to sell 420 million, beginning September 2020.” Then the Senior Counsel states that DECN’s forecast was based on “this apparently baseless forecast chart” (italics mine). Again, why is it not clear to The Senior Counsel?
8. In #16, Bad Boy Berman failed to provide supporting evidence for a claim, and he is charged with making his COVID test kit look too much like the glucose test kit!
9. #17 – restating Berman’s PRs – again . . . guilty by association
10. #20: Perhaps most laughable of all: “stated or suggested in interviews with [SEC] staff” - by now, if you have read all of the PRs, you know that Berman would never have stated or suggested that he “had no idea how many test kits DECN could produce.” The other points are highly likely and mean absolutely nothing
a. “Company had no COVID-19 test kits” – He never said they did!
b. “had not seen any of DECN’s prototype COVID-19 test kits” – of course not, they were in development
c. “knew that the COVID-19 test kits would require component parts . . . “ Yep, anyone with a little bit of sense knows you need part before you can built something.
d. “was looking for sources . . . “ good for him!
e. “. . . no COVID-19 test kits could be sold without FDA approval” [incorrect – approval is not needed, only EUA]. – of course he knew this – it is stated all throughout the PRs.
11. In #22-23, what Bermans stated was true, and it appears The Senior Counsel is really stretching to pin something on Berman here: the material in #23 reveals either sublime stupidity or a loooong stretch . . . BERMAN NEVER SAID THE PRE-EUA WAS “APPROVAL.”
12. #24 – “. . . statements on the website give the misleading impression . . .” – misleading impression to whom? The Senior Counsel? Is he a shareholder?
13. #28 – a spike in share price of a few cents raises “concerns that the market misunderstood the news to believe it to mean that a device had been approved by the FDA” – People who were following DECN and the FDA and the COVID crisis knew better AND they represented, no doubt, the largest percentage of shares. IF the market had believed a device had been “approved by the FDA” – the price would not have stopped at .29, and the Senior Counsel would have known this to be true by observing the stock price action on later days when it was abundantly obvious that no device had been “approved.”
14. It seems The Senior Counsel created his own rhetorical device to attempt to convince readers that Berman had intentionally misled people for some unstated reason – yet all of this is only “apparently” true of DECN – even The Senior Counsel is not sure.
