Nutra Pharma Corp (NPHC)

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Securities and Exchange Commission v. Nutra Pharma Corporation, Erik Deitsch, and Sean Peter McManus

On September 28, 2018, the United States Securities and Exchange Commission (the “SEC”) filed a lawsuit in the United States District Court for the Eastern District of New York (Case No. 2:18-cv-05459) against the Company, Mr. Deitsch, and Mr. McManus. The lawsuit alleges that, from July 2013 through June 2018, the Company and the other defendants defrauded investors by making materially false and misleading statements about t and violated anti-fraud and other securities laws.

The violations alleged against the Company by the SEC include: (a) raising over $920,000 in at least two private placement offerings for which the Company failed to file required registration statements with the SEC; (b) issuing a series of materially false or misleading press releases; (c) making false statements in at least one Form 10-Q; and (d) failing to make required public filings with the SEC to disclose the Company’s issuance of millions of shares of stock. The lawsuit makes additional allegations against Mr. McManus and Mr. Deitsch, including that Mr. McManus acted as a broker without SEC registration and defrauded at least one investor by making false statements about the Company, that Mr. Deitsch engaged in manipulative trades of the Company’s stock by offering to pay more for shares he was purchasing than the amount the seller was willing to take, and that Mr. Deitsch failed to make required public filings with the SEC. The lawsuit seeks both injunctive and monetary relief.


On May 29, 2019 (following each of the defendants filing motions to dismiss), the SEC filed a First Amended Complaint which generally alleged the same conduct as its original Complaint, but accounted for certain guidance provided by the United States Supreme Court in a case that had been recently decided. Each of the defendants then moved to dismiss the SEC’s First Amended Complaint. On March 31, 2020, the Court entered an Order granting in part and denying in part the various motions to dismiss. Following that Order, the SEC filed a Second Amended Complaint (the operative pleading) and the defendants have filed their answers which generally deny liability. At this time, discovery is closed and the SEC has indicated an intent to file a summary judgment motion regarding certain non-fraud claims asserted in its Second Amended Complaint. The defendants have opposed the SEC’s request to file such motion(s). The Court conducted a hearing on February 23, 2021 and set an initial briefing schedule for the SEC’s Motion for Partial Summary Judgment wherein the Plaintiffs’ Motion for Partial Summary Judgment was due on April 5, 2021, the Defendants’ Consolidated (i.e., collectively, Nutra Pharma Corporation, Erik “Rik” Deitsch, and Sean McManus) Response Brief to the SEC’s Motion was due May 3, 2021, and the Plaintiffs’ Reply Brief was due on May 19, 2021. On March 23, 2021, the Plaintiff filed a Motion for Extension of Time to file the Motion for Partial Summary Judgment. On April 9, 2021, the Plaintiff filed a Motion for Partial Summary Judgment, Defendants’ filed a Memorandum of Law in Opposition to Plaintiff’s Motion on May 7, 2021, and Plaintiff filed its Reply brief on May 21, 2021. On August 31, 2022, the Court entered an Order Granting in Part and Denying in Part the SEC’s Motion for Partial Summary Judgment. Specifically, the Court granted the SEC’s Motion for Partial Summary Judgment on Claim 7 (Section 5 of the Securities Act) against the Company and Mr. Deitsch, Claim 8 (Section 13(d) of the Exchange Act and Rule 13d-2(a) thereunder) against Mr. Deitsch, Claim 9 (Section 16(a) of the Exchange Act and Rule 16a-3 thereunder) against Mr. Deitsch, and Claim 10 (Section 13(a) of the Exchange Act and Rule 13a-11 thereunder) against the Company, but denied the SEC’s Motion for Partial Summary Judgment on Claim 14 (alleged aiding and abetting Nutra Pharma’s violation of Section 13(a) of the Exchange Act, and Rule 13a-11 thereunder) against Mr. Deitsch. The remedies pertaining to the claims addressed in the SEC’s Partial Summary Judgment will be determined by the Court at a later date. On September 16, 2022, Mr. Deitsch filed a Motion to Supplement his Initial Disclosures pursuant to Rule 26(a)(1) of the Federal Rules of Civil Procedure and to re-open discovery for the limited purpose of obtaining discovery from certain Nutra Pharma shareholders identified by Mr. Deitsch in his supplement to the initial disclosures. The Magistrate Judge assigned to the case granted Deitsch’s Motion on that same day and discovery has been re-opened on a limited basis. When the discovery in the case is complete, the case will proceed to trial on the remaining claims in the SEC’s Second Amended Complaint that were not addressed in the SEC’s Partial Summary Judgment. Nutra Pharma disputes the allegations in this lawsuit and continues to vigorously defend against the SEC’s claims. Mr. Deitsch and Mr. McManus have similarly defended the lawsuit since its filing and each contest liability. The Company does not believe that it engaged in any fraudulent activity or made any material misrepresentations concerning the Company and/or its products.