The SEC has filed charges against Meta Materials Inc. and its former CEOs, John Brda and George Palikaras, alleging market manipulation. The SEC claims that the company raised $137.5 million from investors in June 2021, just before a merger between Torchlight Energy Resources Inc. and Metamaterial Inc. The charges assert that Brda and Palikaras orchestrated a scheme to artificially inflate the company’s stock price by issuing a preferred stock dividend, which they hinted would trigger a “short squeeze” and misled investors about the company’s asset sales.
The complaint details how Brda and Palikaras manipulated the stock market by issuing misleading statements about the dividend and the company’s value, causing the stock price to temporarily rise. This manipulation allowed the company to sell shares at inflated prices, benefiting financially from the scheme. The SEC’s investigation found that this conduct was a deliberate attempt to deceive investors, with the intention of profiting from the artificially high stock prices.
The SEC’s complaint seeks permanent injunctions, officer-and-director bars, and civil penalties against Brda and Palikaras for violating federal securities laws. The agency also demands disgorgement with pre-judgment interest from Brda. The SEC has already reached a settlement with Meta Materials, requiring the company to pay a $1,000,000 penalty and cease and desist from further violations.
The ongoing SEC investigation includes a separate probe into subsequent events related to Meta Materials. The SEC urges individuals with relevant information to come forward and submit tips. The litigation against Brda and Palikaras will continue, overseen by the SEC’s Fort Worth Regional Office.
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