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SEC accuses Burbank company of misleading investors

June 26, 2013|By Stuart Pfeifer
  • Michele Wein Layne, director of the SEC's Los Angeles office.
Michele Wein Layne, director of the SEC's Los Angeles office. (Katie Falkenberg / Los Angeles…)

The Securities and Exchange Commission accused a Burbank medical imaging device company and its chief executive of fraud for allegedly misleading investors about the Food and Drug Administration’s views of one of its products.

In a lawsuit filed Tuesday in federal court in Los Angeles, the SEC said Imaging3 Inc. and its founder and chief executive, Dean Janes, made false statements about the company’s chances of gaining FDA approval of a three-dimensional scanner used in medical diagnosis.

After the FDA denied approval of the device in 2010, Janes told investors that the FDA’s issues were “not substantive” and largely “administrative,” the SEC said. Janes failed to mention that in an October 2010 letter, the FDA said the device had a potential for overheating and that sample images appeared “scientifically invalid and useless.”

Mark Richardson, an attorney who represents the company and Janes, did not immediately respond to a request for comment.

The SEC lawsuit seeks financial penalties and a court order barring Janes from serving as an officer or director of a public company.

Imaging3 filed for bankruptcy in 2012. The company’s stock trades for less than one cent a share.

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