Florida company lied about N95 masks for sale in a coronavirus scam, the SEC charges
A West Palm Beach company’s claims about available N95 masks added up to nothing but securities fraud, the Securities and Exchange Commission charged in a federal court filing on Tuesday.
Praxsyn has tried to say that the only thing here is just a failure to communicate clearly.
Also, the SEC wants civil money penalties from Praxsyn and company president Frank Brady banned from any future roles as officer or director of a public company.
The filing describes Praxsyn as “a Nevada corporation incorporated in 2014 with its principal offices purportedly located in West Palm Beach, Florida.” Praxsyn’s 2019 website places it in a commercial building at 777 S. Flagler Dr. in West Palm, the address registered on April 20 with the state of Florida, according to Sunbiz.org.
Praxsyn stock is traded on OTC Link, or was before the SEC suspended its trading March 26 “because of questions regarding the accuracy and adequacy of information in the marketplace since at least February 27, 2020.”
That’s when Praxsyn issued a news release that said the company was “negotiating the sale of millions of masks meeting the NIOSH N95 mask standard and similar standards, capable of protecting wearers from breathing in viruses, including Novel Coronavirus COVID-19.”
Praxsyn shares opened at 95 cents a share, leaped to 1.88 during the day before landing at 1.06 after a day when 30.82 million shares were traded, an exponential volume jump from 3.21 on Feb. 26.
On March 4, Praxsyn’s press release stated it was “pleased to announce that it has a large number of N95 masks, capable of protecting wearers from inhaling viruses, including the COVID-19 Coronavirus available for order...Utilizing a worldwide network, Praxsyn has created a direct pipeline from manufacturers and suppliers to buyers giving those that qualify, the fairest price on the market.”
On this day, 12.04 million shares were traded, the third highest volume day behind Feb. 27 and Feb. 28. Praxsyn opened at 81 cents per share, dropped to 53 cents at one point and closed at 64 cents.
Five days after the SEC put Praxsyn on the Do Not Trade list, the company issued a press release headlined “Praxsyn Retracts Prior Press Releases Regarding Surgical masks for Corona Virus.”
“...our initial press release could give the reader the impression that we had millions of masks on hand,” the March 31 release read. “This is not the case. Rather we had been offered millions of masks and were attempting to vet that supply for quality and consistency while simultaneously vetting corresponding orders.
“It was never our intention to leave any reader with the impression that we had masks on hand, but rather we were ready to take orders and stand as an intermediary in closing sales to provide masks for sale abroad.”
Third-party Mexican inspectors found the masks not up to snuff, the company claimed, and Praxsyn couldn’t find any substitutes.
