SEC Charges Company and Two Executives for Misleading COVID-19 Disclosures

Washington, D.C.--(Newsfile Corp. - July 7, 2021) - The Securities and Exchange Commission today announced charges against Parallax Health Sciences Inc. for making misleading statements about its efforts to fight COVID-19. The SEC also charged Parallaxs Chief Executive Officer Paul Arena and its Chief Technology Officer Nathaniel Bradley for their roles in the statements. Each party has offered to settle the charges. The SEC temporarily suspended trading in Parallaxs common stock on April 10, 2020, due to questions about the accuracy of the companys statements.

According to the SECs complaint filed in the U.S. District Court for the Southern District of New York, Parallax issued a series of press releases in March and April 2020 falsely claiming that its purported COVID-19 screening test would be available soon and that it had medical and personal protective equipment (PPE) for immediate sale. The complaint alleges that Parallaxs insolvency prevented it from developing the screening test, and that the companys projections showed thateven if the company had the funds, it would take more than a year to develop the test. The complaint also alleges that Parallax never had the medical equipment or PPE it offered for sale and that several factors prevented the company from acquiring the equipment, including that it did not have enough money to purchase the equipment and that it lacked the Food and Drug Administration registrations required to import and sell the equipment. Additionally, the complaint alleges that Arena drafted the misleading press releases to boost Parallaxs declining stock price, and that the companys stock price increased after they were disseminated.

We allege that Parallax misled investors that the company was positioned to capitalize on opportunities created by the COVID pandemic. Such misinformation jeopardized investors at precisely the moment when investors were attempting to respond to the financial implications of a public health emergency, said Paul G. Levenson, Director of the SECs Boston Regional Office.

The SECs complaint alleges that Parallax and Arena violated Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Bradley violated Section 17(a)(3) of the Securities Act. Without admitting or denying the SECs allegations, Parallax, Arena, and Bradley consented to judgments permanently enjoining them from future violations of the charged provisions and requiring them to pay penalties of $100,000, $45,000, and $40,000, respectively. Arena also agreed to be prohibited for five years from acting as a public company officer or director and from participating in an offering of penny stock. Bradley, who assisted Arena in drafting two of the misleading press releases, agreed to be prohibited for three years from participating in an offering of penny stock. The settlements are subject to court approval.

The SECs case is being handled by Andy Palid, Sue Curtin, Rua Kelly, Al Day and Michele Perillo of theBoston Regional Office. The Commission appreciates the assistance provided by the Financial Industry Regulatory Authority and the U.S. Food and Drug Administration.

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