Quantum BioPharma Ltd. (NASDAQ: QNTM) announced that the United States District Court for the Southern District of New York denied a joint motion to dismiss filed by defendants CIBC World Markets and RBC Dominion Securities in the company's market manipulation lawsuit seeking $700 million in damages.

The biopharmaceutical company filed the lawsuit alleging that between January 1, 2020, and August 15, 2024, the defendants used "spoofing" techniques to manipulate Quantum BioPharma's share price. The company claims these activities violated Section 10(b) and Rule 10b-5(a) and (c) and Section 9(a) of the Securities Exchange Act of 1934.

The court's ruling allows the case to proceed after defendants sought to have the lawsuit dismissed. Spoofing involves placing and quickly canceling large orders to create false impressions of market demand.

Quantum BioPharma operates as a biopharmaceutical company focused on developing treatments for neurodegenerative and metabolic disorders and alcohol misuse disorders. The company trades on NASDAQ and the Canadian Securities Exchange under the ticker QNTM.

Through its subsidiary Lucid Psycheceuticals Inc., the company is developing Lucid-MS, described as a compound designed to prevent myelin degradation associated with multiple sclerosis. Quantum BioPharma also holds a 19.84% stake in Unbuzzd Wellness Inc., according to the press release statement.