Co-Diagnostics settles with SEC over charges of ‘misleading’ releases

The Securities and Exchange Commission announced that it deems it appropriate that cease-and-desist proceedings be, and hereby are, instituted against Co-Diagnostics and in anticipation of the institution of these proceedings, the respondent has submitted an offer of settlement, which the Commission has determined to accept. “These proceedings concern Co-Diagnostics’s issuance of misleading press releases on February 6 and 10, 2020 concerning a screening test it had developed to detect the novel coronavirus, later named COVID-19 by the World Health Organization. Specifically, the press releases misleadingly suggested that the test could be used by consumers to detect COVID-19, when in fact, at that time, the test was intended for Research Use Only, which meant it could not be sold for clinical diagnostic purposes. Co-Diagnostics offered and sold securities to investors after it issued the February 6 and 10, 2020 press releases. In addition, Co-Diagnostics failed to disclose related party transactions involving the family members of the company’s Chief Executive Officer and then-Chief Financial Officer, Secretary, and General Counsel in its annual reports for the fiscal years ended December 31, 2018, 2019, and 2020 and in its definitive proxy statements filed in 2019, 2020, and 2021,” the SEC stated.