BERKELEY, Calif., May 6, 2014 /PRNewswire/ -- Hagens Berman Sobol Shapiro LLP reminds investors of the securities fraud class action against CytRx Corporation (NASDAQ: CYTR) ("CytRx" or "the Company") and the May 13, 2014 deadline to file for lead plaintiff. Investors who have suffered financial losses can contact Hagens Berman Partner Reed Kathrein, who is leading the firm's investigation, by emailing CytRx@hbsslaw.com, calling 510-725-3000 or visiting http://hb-securities.com/investigations/CytRx.
The securities fraud class-action lawsuit filed against CytRx on March 14, 2014 is on behalf of all persons who purchased or otherwise acquired CytRx stock between Nov. 20, 2013 and March 13, 2014 (the "Class Period"). The lawsuit also covers those who purchased CytRx stock in the offering completed February 5, 2014, in which CytRx netted more than $80 million.
The complaint, filed in the U.S. District Court for the Central District of California, alleges that the defendant violated federal securities laws when it employed The DreamTeam Group to write misleading articles under aliases without disclosing payment for the articles or any affiliation with the company. The complaint alleges that following the dissemination of CytRx's alleged false stock-promoting statements, the company's stock reached a high of $8.35 per share on Jan. 30, 2014.
On Feb. 5 2014, CytRx completed the sale of more than 11 million shares at $6.50 per share, acquiring more than $80 million in net proceeds, according to the complaint.
On Feb. 12, 2014, a senior columnist at TheStreet.com published an article, titled "Galena Biopharma Pays For Stock-Touting Campaign While Insiders Cash Out Millions," claiming an affiliated biotechnology company was engaging in a misleading campaign to boost the company's stock price. Following its publication, CytRx's alleged stock-touting practices and employment of the same firm – DreamTeam – were unveiled. Following this news, CytRx's stock price fell from $6.60 to a close of $6.04, declining in value 8.5 percent and damaging investors, according to the complaint.
On March 13, 2014, an additional published report alleged that CytRx shares quadrupled during a promotion via DreamTeam and that company management edited and approved the paid articles, according to the complaint. Following publication of the article, CytRx stock fell from $4.78 per share to a close of $4.17 per share on March 13, 2014. CytRx's stock continues to trade below previous figures, closing at $3.37 on May 5, 2014.
"CytRx's stock took a nosedive following this news, which leads us to believe that claims being made about the company's dealings were not entirely forthright," said Mr. Kathrein. "Hagens Berman intends to act for the best interest of shareholders to uncover the story here and is continuing its determined investigation into CytRx's actions."
The deadline to file for lead plaintiff in the securities fraud class action is May 13, 2014.
Persons with non-public information regarding CytRx should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information call Reed Kathrein at 510-725-3000 or email one of the links above.
About Hagens Berman
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities. The Firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the law firm and its successes can be found at www.hb-securities.com. Read the firm's Securities Newsletter at http://www.hb-securities.com/newsletter.
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SOURCE Hagens Berman Sobol Shapiro LLP