The microbiome testing organization made deceptive claims about its capabilities and a business technique that allegedly depended on tricking specialists into requesting redundant tests, as suggested by the US government.
Organizers behind uBiome, a microbiome testing organization that failed and went out of business after an FBI crackdown in 2019, were accused of misrepresenting protections by the Securities and Exchange Commission on Thursday (March 18).persuading specialists to organize nonsense tests for the organization and guaranteeing repayment from life-saving providers networks.
“Financial backers are qualified to know the material dangers of the organizations they put resources into, no matter how pioneering those organizations guarantee.”
Founded in 2012, San Francisco-based uBiome began as a resident science project that welcomed workers to send in stool samples for testing.The SEC alleges that the organization’s action plan depended on fraudulent specialists requesting clinically futile tests — often just repeat tests of old patient examples — so that uBiome could guarantee repayment from safety net providers.
In 2018—the year the organization was valued at nearly $600 million—Apte and Richman advanced the organization “despite watching the enormous dangers threatening their action plan, remembering that few safety net providers had tested uBiome’s compounding procedures before and during the [Series C] financing, despite notices of representative trademark racketeering,” the entire SEC grumbles.
The complaint adds that the pair “defrauded financial backers by touting phenomenal revenue development while hiding from financial backers that uBiome’s income relied on guarantors being ignorant of the organization’s reckless accounting examinations.”
SEC seeks SEC accuses uBiome founder of defrauding investors. The defendants say they are to prevent the two pioneers from later becoming bosses or officials in different organizations. Apte and Richman, who married in 2019, do not yet have court dates scheduled, SF Gate reports. Legal advisers for the originator did not immediately respond to Reuters requests for comment.
clinical trial, diagnostic, direct-to-consumer, fraud, health insurance, microbiology, dice, pharmaceutical and biotechnology, research integrity, Securities and Exchange Commission, stool