According to ChainCatcher, the U.S. Securities and Exchange Commission issued a notice accusing Meta Materials and former CEO John Brda and George Palikaras of market manipulation, fraud and other violations. The company has agreed to resolve the SEC's allegations in administrative proceedings, while the lawsuit against Brda and Palikaras will proceed in federal district court.
The SEC alleges in a complaint filed in the U.S. District Court for the Southern District of New York that Brda and Palikaras planned and implemented a manipulative scheme that included issuing a preferred stock bonus immediately prior to the merger. The complaint alleges that Brda and Palikaras told certain investors and advisors, and suggested through social media, that the bonus would artificially increase the price of the company’s common stock by forcing short sellers to exit their positions and trigger a “short squeeze.”
