Development stage companies often rely upon equity financing to fund their operating expenses. So if the share price is artificially low due to illegal selling, it reduces the amount of financing the company can obtain by selling their shares.
The company had more than "some cash and a history of failed clinical trials." They had tens of millions of dollars worth of illegal shares in the market.
In trying to understand how Nasdaq could justify their actions, I had speculated that the funds used by Shkreli may have been from the fruit of a poisonous tree, as I recall phrasing it. But I still haven't seen proof of "fraudulently obtained funding." Have you?
Nasdaq was required by law to give the company 60 days to regain compliance. The company had made moves to do so. Nasdaq's punitive action was premature, and unjustly harmed shareholders. The SEC, chartered to protect the investing public, should move against Nasdaq.
And the Oversight Committee should ensure that the SEC does what it is obligated to do. I'd like to see Shkreli "Trump-up," and tell the Oversight Committee that THEY are part of the problem they claim to be trying to solve.
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