A Connecticut-based investment firm illegally obtained $500,000 in “short-swing” profits by selling shares of a pharmaceutical company in which the firm owned a stake larger than 10 percent, a stockholder alleged in a lawsuit filed Friday.
According to the complaint, Nantahala Capital violated the Securities Exchange Act by selling nearly 700,000 shares of Pain Therapeutics in a matter of months, reaping a profit of at least $500,000. Nantahala Capital is accused of violating a law making it illegal for anyone holding more than 10 percent of a publicly traded company’s stocks to participate in “short-swing” sales.
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