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Investigations

PixarBio & Frank Reynolds, M. Jay Herod, and Kenneth Stromsland— Alleged Trading Manipulation Scheme

PixarBio CEO Frank Reynolds, & M. Jay Herod & Kenneth Stromsland Allegedly Took Part in Securities Fraud & Manipulated PixarBio Trading

Frank Reynolds, 55, the CEO of Boston-based PixarBio, and two associates, M. Jay Herod, 51, and Kenneth Stromsland, 45, allegedly took part in a an elaborate securities fraud scheme to defraud PixarBio investors by producing false and misleading statements about the company, according to a Complaint from the U.S. Attorney’s Office, District of Massachusetts, under review by attorney Paul Scarlato.

Attorney Paul Scarlato, of the Goldman, Scarlato & Penny law firm, would like to talk to investors and is investigating activity related to PixarBio’s alleged securities fraud. Investors who believe they may have lost money in activity related to activity related to PixarBio’s alleged securities fraud are encouraged to contact attorney Paul Scarlato with any useful information or for a free, no obligation discussion about their options.

The aforementioned scheme also allegedly made misleading statements regarding PixarBio’s prospects, its financing, and the background and track record of Reynolds, according to the aforementioned Complaint.

Stromsland and Herod Allegedly Took Part in Manipulative Trades in PixarBio Stock that Simulated Market Interest in the Stock & Artificially Moved up the Trading Price

Stromsland and Herod, beginning in or about November 2016, allegedly manipulated trades in PixarBio stock that simulated market interest in the stock and artificially kicked up the stock price, according to the aforementioned Complaint under review by attorney Paul Scarlato.

Stromsland and Herod’s alleged trading manipulation, the Complaint notes, allegedly included:

•   overlapping orders to buy and sell PixarBio stock at the same price per share, a classic technique known as “matched trading”

•   small purchases to increase the trading price submitted shortly before trading closed at 4:00 p.m., a maneuver known as “marking the close”

•   orders to buy at a price much higher than the price of the preceding market transaction, and Herod then allegedly sharing the proceeds of his trading with Reynolds and PixarBio itself

The alleged charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $5 million, and sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors, the Complaint reports.

Securities Lawyer Investigating

The Goldman, Scarlato & Penny law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating PixarBio’s alleged securities fraud. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Paul Scarlato, a securities lawyer, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions, and has helped recover tens of millions of dollars on behalf of investors.

Investors who believe they lost money as a result of PixarBio’s alleged securities fraud may contact attorney Paul Scarlato for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at scarlato@lawgsp.com, or through the contact form on this webpage.

In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent updates regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases. Also, the brokercheck report linked to some of our blogs is the up-to-date version as of the date of posting. Visitors may check the most recent version of each brokercheck report at www.finra.org.

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