SAN DIEGO and LOS ANGELES, March 21, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of CytRx Corporation (NASDAQ: CYTR) has filed a federal securities fraud class action complaint in the U.S. District Court for the Central District of California. The complaint alleges that the company and certain of its officers and directors violated the Securities and Exchange Act of 1934 between November 22, 2013 and March 13, 2014, including the company's public offering on February 5, 2014 (the "Class Period"). CytRx is a biopharmaceutical research and development company specializing in oncology.
CytRx Is Accused of Engaging in a Misleading Promotional Campaign
According to the complaint, shares of CytRx fell $0.56 per share, or 8.5%, to close at $6.04 on February 12, 2014, following the publication of an article on TheStreet.com claiming that CytRx retained an investor relations firm accused of using deceptive practices to tout its clients' stock. Specifically, the complaint charges that an investor relations firm, the DreamTeamGroup, was hired by CytRx to tout the company and promote its stock. The complaint charges that the DreamTeamGroup misled investors by publishing favorable articles about its clients while falsely stating that the articles were written by authors who were not paid by the company. Then, on March 13, 2014, CytRx's stock fell an additional $0.61 per share to close at $4.17, following the publication of an article on seekingalpha.com detailing the role of CytRx management in editing, and approving the paid for articles.
The complaint further alleges that CytRx's stock traded at artificially high prices because of this misleading campaign, and that CytRx's CEO, President and Director, Steven A. Kriegsman, sold $2.1 million of Galena Biopharma, Inc. shares while that stock was artificially inflated because of a similar promotion employing the DreamTeamGroup. Mr. Kriegsman has been a member of the Board of Directors at Galena since 2006.
CytRx Shareholders Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo
If you invested in CytRx and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: www.robbinsarroyo.com/shareholders-rights-blog/cytrx-corporation
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP