Albert Chow v. Enochian Biosciences Inc. et al

On July 26, 2022, Albert Chow (“Plaintiff”), represented by Jennifer Pafiti of Pomerantz LLP and Lesley F. Portnoy of the Portnoy Law Firm, filed a class-action lawsuit against Enochian, Mark Dybul (“Dybul”), Luisa Puche (“Puche”), Renè Sindlev (“Sindlev”), Carol L. Brosgart (“Brosgart”), Gregg Alton (“Alton”), James Sapirstein (“Sapirstein”), Carl Sandler (“Sandler”), Henrik Grønfeldt-Sørensen (“Grønfeldt-Sørensen”), Jayne McNicol (“McNicol”), Evelyn D’An (“D’An”), (collectively, “Defendants”), seeking damages for alleged violations of the Securities Exchange Act (“Exchange Act”). This case was filed in the U.S. District Court for the Central District of California, with Judges Dolly M. Gee and Alexander F. MacKinnon presiding.

Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3). In the complaint, Plaintiff stated, “This is a federal securities class action on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Enochian securities between September 24, 2020 and May 31, 2022, both dates inclusive (the ‘Class Period’).”

Plaintiff further stated, “Enochian is a pre-clinical stage biotechnology company that purportedly researches and develops pharmaceutical and biological products for the human treatment of human immunodeficiency virus (‘HIV’), hepatitis B virus (‘HBV’), influenza and coronavirus infections, and cancer.”

Plaintiff alleged, “Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies like Gumrukcu was not a licensed doctor and had no verifiable degrees beyond high school, accordingly, the scientific and technological underpinnings of Enochian’s product pipeline, purportedly invented by Gumrukcu, were dubious at best, accordingly, the Defendants had significantly overstated the commercial prospects for the Company’s product pipeline.”

Plaintiff further alleged, “On May 25, 2022, the U.S. Department of Justice (‘DOJ’) announced that Gumrukcu had been arrested and charged in a murder-for-hire conspiracy. On this news, Enochian’s stock price fell $2.17 per share, or 36.97%, to close at $3.70 per share on May 25, 2022.”

Plaintiff also alleged, “Then, on June 1, 2022, Hindenburg Research (‘Hindenburg’) published a report on Enochian entitled ‘Miracle Cures and Murder For Hire: How A Spoon-Bending Turkish Magician Built A $600 Million Nasdaq-Listed Scam Based On A Lifetime Of Lies’ (the ‘Hindenburg Report’). Gumrukcu was arrested by authorities after the State of California accused him of a slew of white-collar crimes, including fraud, identity theft, and check kiting – a total of 14 felonies.”

Plaintiff then alleged, “On this news, Enochian’s stock price fell $1.495 per share, or 28.42%, to close at $3.765 per share on June 1, 2022. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.”

Plaintiff listed two claims for relief, including claims for the alleged violation of Section 10 (b), 20 (a), and Rule 10b – 5 of the Exchange Act. In the prayer for relief, Plaintiff requested a judgment seeking certification of the class. Plaintiff also requested an award seeking damages, with pre-judgment and post-judgment interest and litigation costs. 

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