On June 13, 2018, investors sued Akers Biosciences, Inc., (“Akers” or the “Company”) in United States District Court, District of New Jersey. Plaintiffs in the federal securities class action allege that they acquired Akers stock at artificially inflated prices between May 15, 2017 and June 5, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. Here’s what you need to know about the Akers class action:

Summary of the Allegations

Company Background

Along with its subsidiaries, Akers (NASDAQ: AKERS) creates, makes and distributes “rapid screening and testing products” for delivery of healthcare information to healthcare providers and consumers.

Based in New Jersey, the Company has been in business since 1989. According to its website, Akers’ initial goal was to create “proprietary, in vitro diagnostic technologies that accelerate the rate at which clinicians, and in some cases consumers, can obtain health information.” It is now “dedicated to the development of time- and cost-efficient, single-use devices that can be utilized almost anytime, anywhere.”

Today the Company has customers both at home and also abroad.

Summary of Facts

Akers and two of its senior executives (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.

Specifically, they are accused of omitting truthful information about the recognition of certain revenue and the extent of the weakness in certain internal controls in SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Akers stock to trade at artificially inflated prices during the time in question.

The truth emerged in a series of events that transpired between May 21, 2018 and June 5, 2018. The Company first informed the SEC something was amiss when it filed a form stating that it would be unable to meet the deadline for filing a quarterly report. It attributed its inability to do to findings made during an ongoing review of the “characterization of certain revenue recognition items.”

Then, before the market opened on May 29, the Company issued a press release announcing that, “Raymond F. Akers Jr., Ph.D. has resigned as a director of the Company with immediate effect.”

On June 1, the Company filed another form with the SEC in which it alleged that, “Raymond Akers ‘has not been fully cooperative’ with its review of certain revenue recognition items for prior quarters.”

Finally, on June 5, the Company filed another form with the SEC, which was accompanied by a letter written on Raymond Akers’ behalf. The letter refuted the allegation characterized him as a “whistleblower” and credited him with demanding the investigation regarding revenue recognition.

History Repeating Itself

As alleged in the June 13 complaint, Akers repeatedly made misleading public statements during the Class Period.

For example, on a form Filed with the SEC at the beginning of the Class Period, the Company stated in pertinent part: “There were no changes in our internal control over financial reporting … during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.”

On another form filed with the SEC on April 3, 2018, the Company stated that it would be unable to meet the deadline for filing its Annual Report for the period ended December 31, 2017. It also explained that it would be unable to do so because it needed “additional time to gather information and finalize its financial statements.”

Nevertheless, the Company filed its Annual Report that day. In it, Akers said that it “identified a material weakness in our controls related to segregation of duties and other immaterial weaknesses in several areas of data management and documentation.” In the Annual Report, the Company also indicated that, “there were no changes in internal control over financial reporting that materially affected or were reasonably likely to materially affect the Company’s internal control over financial reporting.”

Impact of the Alleged Fraud on Akers’ Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is August 13, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Akers common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.