A federal magistrate judge in Delaware granted Lunai Bioworks Inc. (NASDAQ: LNAI) permission to conduct expedited discovery to identify unnamed defendants accused of naked short selling the company's stock on the Nasdaq Stock Market.

The court order, issued May 20, allows Lunai to proceed with discovery before the typical timing under Federal Rules of Civil Procedure. The judge determined Lunai established "good cause" and demonstrated a prima facie case for its claims against the unidentified short sellers.

Lunai filed the lawsuit May 11 through law firms Dickinson Wright and Fox Rothschild, alleging securities fraud and market manipulation against "John Doe" defendants who allegedly engaged in naked short selling from late 2025 through the first half of 2026. The complaint seeks compensatory damages and identifies defendants as Does 1-50, Roe Corporations 1-50, and XYZ LLCs 1-50.

The court found that Lunai showed it has no other way to identify the alleged wrongdoers aside from obtaining discovery, and that expedited discovery is necessary because evidence may otherwise be destroyed. According to court documents, Lunai will seek information from broker-dealers and custodians who traded the company's stock.

The discovery requests will include the identity of investors who took naked short positions, confirmation that naked short sellers violated borrowing requirements, information about shares sold short, and trading records. The 18-page discovery request contains 21 specific items.

The complaint includes three counts: securities fraud under Section 10(b) of the Securities Exchange Act, market manipulation under Section 9(a) of the Securities Exchange Act, and wire fraud under federal statute. Lunai seeks compensatory damages, injunctive relief, and recovery of legal costs.

Lunai describes itself as an AI-driven platform for precision medicine that identifies targets for therapeutics and biodefense countermeasures. The company has developed cancer immunotherapy for solid tumors and operates from Sacramento, California.