Early this year, clinical stage development company Relmada Therapeutics announced it had filed a lawsuit against Laidlaw & Company (UK) Ltd. in the state of Nevada. In accordance with this action, they also recently implemented an 8-k filing, increasing the damage amount to $20 million.
The new filing amends the original papers to include breach of fiduciary duty, injunctive relief, defamation and business disparagement, tortious interference with prospective economic advantage and several violations.
For years, Laidlaw served as Relmada’s primary investment banker. They were the company’s placement agent in Relmada’s May 2014 and December 2011 offerings. The firm also served as Relmada’s financial adviser during their merger with Camp Nine, Inc., after which Relmada became a public company.
The therapeutics company has alleged Laidlaw violated a number of federal securities laws, including disseminating misleading and false proxy materials that hurt Relmada’s stockholders and reputation. While a prestigious firm in its own right, Laidlaw has a history of noncompliance with securities laws. The firm has also been noted for consistently hiring compliance officers, brokers and other executives from less than reputed brokerage firms with histories of FINRA violations.
Relmada argues that the law firm’s recent behavior has incurred significant expenses as a result of Relmada’s efforts to protect their stockholders from Laidlaw’s negligent actions. Further, Relmada attests their NASDAQ standing was adversely and materially affected. As evidence, Relmada has referred to a decline in the company’s stock price. Between October 2015 and January 2016, Relmada’s stock went from $4.03 to $1.65 per share. This drop took place despite noticeable positive results in the company’s research for treating opioid dependence indicators and chronic pain. There was also the completion of its study of d-Methadone for neuropathic pain.
Both companies have issued letters to stockholders and other pertinent parties about these action(s).