uBiome Founders Charged by SEC| Goodman & Nekvasil P.A. May Recover Investor Losses
According to the SEC:
During 2018, Jessica Richman and Zachary Apte (together, “Defendants”) fraudulently raised approximately $60 million for the private company they founded, uBiome, Inc. (“uBiome” or “the company”), a San Francisco medical testing company that Richman told investors was “inventing the microbiome industry” and “making products that improve people’s lives.” The 2018 “Series C” fundraising round led by Defendants valued uBiome at nearly $600 million, and enriched Richman and Apte by millions each through the sale of their own uBiome shares during the round.
To make the securities offering a success, Richman, who was the Chief Executive Officer of uBiome, and Apte, who was its Chief Scientific Officer, painted a false picture of uBiome as a rapidly growing company with a strong track record of reliable revenue through health insurance reimbursements for its tests, one to detect “gut” microorganisms and another for women’s health. Defendants also made numerous misrepresentations that were designed to assure investors that the company’s business model and its tests were widely accepted by health insurance companies and downplay any risks to the company’s revenue. Investors invested millions of dollars in uBiome based on Defendants’ misrepresentations.
uBiome’s purported success in generating revenue, however, was a sham. It depended on duping doctors into ordering unnecessary tests and other improper practices that Richman and Apte directed and which, once discovered, led insurers to claw back their previous reimbursement payments to uBiome. Although uBiome employees raised concerns regarding the company’s practices, Defendants failed to take action to remedy the improper practices. They also failed to disclose those practices to investors. Moreover, Defendants acted to conceal the improper practices from uBiome’s general counsel, uBiome’s board, and insurers, including directing uBiome employees to provide insurers with backdated and misleading medical records to substantiate the company’s prior claims for reimbursement.
Defendants’ scheme unraveled in or about April 2019, when the company’s Board of Directors initiated an internal investigation, following the FBI’s execution of a search warrant at uBiome’s San Francisco headquarters. That investigation brought uBiome’s improper billing practices to light and made clear that uBiome’s business model was untenable. uBiome then suspended its clinical tests business, and in September 2019 ceased operations and filed for bankruptcy protection. The company is currently undergoing Chapter 7 bankruptcy liquidation.
Investors in uBiome May Recover their Losses with Goodman & Nekvasil, P.A.
If you invested in UBiome, Goodman & Nekvasil, P.A. may help you. Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, has recovered more than $200 million dollars on behalf of victimized investors.
All our cases are handled on a purely contingency fee basis by Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA. Kalju Nekvasil, Esq. has practiced in this area of the law for more than 35 years.
There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf.
If you incurred investment losses in uBiome and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.