Opinion ID: 6343341
Heading Depth: 2
Heading Rank: 3

Heading: The Public Revelations

Text: On February 2, 2018, an online commentator, “Fuzzy Panda” posted an online article that claimed that 22nd Century engaged in a paid stock promotion scheme to illegally inflate its share price. The Company’s stock price fell by 16.9%. On October 25, 2018, Fuzzy Panda posted a second article that disclosed the FOIA request denial and suggested that the SEC was investigating the Company. The article also suggested that the Company had paid undisclosed promoters to pump up its stock price in advance of the October 2017 stock offering. The next day, the Company’s stock price fell by 4.3%. 10 Joint App. at 55. 11 Joint App. at 55–56 (ellipses in original). 8 No. 21-0347-cv In response, on October 26, 2018, the Company, for the first time, broke its silence about the SEC investigation. But it did so by denying any knowledge of an “enforcement proceeding.” The Company issued a press release saying the October 25 article was “highly deceptive” and that the Company “has not received any notice of, and the Company has no knowledge of, any enforcement proceeding against [the Company] by the SEC or any other regulator.” 12 On April 17, 2019, Fuzzy Panda posted a third article, repeating the undisclosed stock promoters and SEC investigation allegations. The Company’s stock price fell again. The next day, the Company issued another statement denying both the illegal stock promotion and SEC investigation claims, stating that the article “falsely alleges that [the Company] is supposedly under SEC investigation.” 13 On July 26, 2019, the Company announced that Sicignano had resigned as CEO for “personal reasons” but would continue to act as a consultant to the Company. 14 The Company’s stock price fell in the days following the announcement. On December 3, 2019, CFO Brodfuehrer retired.