NEW YORK, May 9, 2014 /PRNewswire/ -- Pomerantz LLP announces the filing of a class action lawsuit against CytRx Corporation ("CytRx" or the "Company")(NASDAQ: CYTR) and certain of its officers. The class action, filed in United States District Court, Central District of California and docketed under 14-cv-02689, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of CytRX between November 22, 2013 and March 13, 2014, both dates inclusive (the "Class Period"). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased CytRx securities during the Class Period, you have until May 13, 2014, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
CytRx is a biopharmaceutical research and development company specializing in oncology. The Company is currently focused on the clinical development of aldoxorubicin (formerly known as INNO-206), its modified version of the widely-used chemotherapeutic agent, doxorubicin.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) that the Company had hired a promoter to boost its share price; (2) the promoter had posted misleading articles on behalf of the Company without properly disclosing its paid marketing relationship; and (3) that, as a result of the above, the Company's statements were materially false and misleading at all relevant times.
On February 12, 2014, TheStreet.com published an article entitled, "Galena Biopharma Pays For Stock-Touting Campaign While Insiders Cash Out Millions." The article accused Galena of paying $50,000 to a subsidiary of the stock promotion firm The DreamTeam Group ("DreamTeam") and MissionIR in July 2013 to begin a misleading campaign designed to boost the Company's stock price. According to the article, the investor websites that the DreamTeam and MissionIR operate allegedly touted Galena without properly disclosing that Galena had paid for the promotion. The article also revealed that several articles posted on SeekingAlpha.com touting Galena under the guise of different individual investors were removed from the site after it was discovered that the articles were written by the same person, without disclosure of the paid marketing relationship to Galena. The article alleged that CytRx is also a DreamTeam client, paying $65,000 for a year's worth of stock promotion. The article noted that Defendant Kriegsman is both CEO of CytRx and a director of Galena, and made $2.1 million in profits from selling Galena stock in January 2014.
On this news, shares of CytRx declined $0.56 per share, or nearly 8.5%, to close at $6.04 per share on February 12, 2014, on unusually heavy volume.
On March 13, 2014, Richard Pearson of MOXReports published an article entitled, "Behind The Scenes With Dream Team, CytRx And Galena" on SeekingAlpha.com. The article accused the Dream Team of attempting to hire the author to write paid promotional articles about CytRx and a related company, Galena Biopharma, without disclosing payment. The article provided detailed emails and attachments indicating that CytRx's management was intimately involved in reviewing and editing the paid articles on their own stock at the same time that the Company intended to sell and/or issue shares, thus indicating that the Company was well aware that the articles failed to disclose the paid marketing relationship. The article alleges that the Dream Team's promotional campaign used multiple aliases on third party websites, sometimes pretending to be hedge fund managers touting the stock.
On this news, shares of CytRx declined $0.61 per share, or nearly 13%, to close at $4.17 per share on March 13, 2014, on unusually heavy volume.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
Robert S. Willoughby
SOURCE Pomerantz LLP