Securities & Exchange Commission v. Christopher Plummer, Lex Cowsert, and CytoGenix, SEC Litigation Release No. 23047 (July 2014)
In a new lawsuit, the SEC has charged Plummer, Cowsert, and CytoGenix with fraud on investors by issuing false press releases associated with influenza vaccine development when the company was actually a complete failure and had “lost all of its patents” in a prior lawsuit. The lawsuit charges Plummer as a “serial con artist” who is already serving jail time for an unrelated fraud. [Read the Complaint]
At one time, CytoGenix did appear to have an interesting idea. However, a March 2010 Texas decision (default judgment) awarded all of CytoGenix’s assets to two of its former employees (Frank Vasquez and Lawrence Wunderlich) as compensation for $300,000 owed to them under their employment contracts as adjudged by an arbitrator. Thus, rather than receiving an assignment from CytoGenix, the parties received a court ordered transfer of rights:
Accordingly, it is ordered that all of Cytogenix Inc.’s right, title and interest and to the identified Applications listed in Schedule A to this order, including all foreign patents and patent applications … is hereby assigned … to Frank Vazquez and Lawrence Wunderlich.
The employees, have now assigned their patent rights to a new company known as Star Biologics. See U.S. Patent No. 7,419,964. Star appears to be merely a holding company.
The SEC lawsuit here does not appear to include any criminal charges. However, those may be separately filed by the DOJ.
= = = = =
As the SEC charges move forward, I wonder whether the spurned investors will make any attempt to recover the patent rights as compensation for their loss. The answer to that question likely depends upon whether the patents end up having any real value.