National investment fraud lawyers KlaymanToskes is investigating brokerage firms and financial advisors that sold or managed concentrated positions in Sorrento Therapeutics, Inc. (NASDAQ: SRNE) following the company’s announcement that it has filed for chapter 11 bankruptcy protection in connection with its $173 million in licensing dispute judgments. As a result, the stock is down over 69% year to date.
Brokerage firms that failed to recommend risk management strategies to customers with large, concentrated or margined positions in SRNE or other pharmaceutical and biotechnology stocks may be liable for investor losses.
Investors who suffered significant losses in Sorrento Therapeutics at a full-service brokerage firm are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation to learn about recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery.
Sorrento Therapeutics is a biopharmaceutical company “dedicated to the development of life-saving therapeutics to treat cancer, intractable pain, and infectious disease.” On February 13, 2023, Sorrento Therapeutics, Inc. (NASDAQ: SRNE) and its wholly-owned direct subsidiary, Scintilla Pharmaceuticals, Inc. began voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
Sorrento Therapeutics, Inc. was previously engaged in arbitration against NantCell, Inc. and Immunotherapy NANTibody LLC, before the American Arbitration Association. The arbitration was related to alleged breaches of the April 21, 2015 Exclusive License Agreement entered into between Sorrento and NantCell and the June 11, 2015 Exclusive License Agreement entered into between Sorrento and NANTibody. On December 2, 2022, the arbitrator ruled against Sorrento Therapeutics and issued an award granting $156,829,562 to NantCell and $16,681,521 to NANTibody, in contractual damages and pre-award interest, exclusive of post-award, prejudgment interest.
According to Sorrento Therapeutics’ press release on February 21, 2023, the U.S. Bankruptcy Court for the Southern District of Texas granted the company’s interim approval of $75 million in debtor-in-possession financing from JMB Capital Partners. As of its chapter 11 bankruptcy protection filing, Sorrento Therapeutics had over approximately $1 billion in assets. The company has stated that its approved financing from JMB Capital will allow Sorrento to continue its operations as it restructures its debt.
In a previous 8-K filing with the SEC, Sorrento Therapeutics (NASDAQ: SRNE) disclosed that on February 13, 2023, the company received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) notifying Sorrento Therapeutics that the Nasdaq had determined that the Company’s common stock would be delisted. Nasdaq’s reasoning stated that the decision was made as a result of the company’s Chapter 11 Filings, due to concerns regarding the residual equity interest of the existing listed securities holders and concerns about the Company’s ability to sustain compliance with all requirements for continued listing on Nasdaq, in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1.
FINRA (Financial Industry Regulatory Authority) is responsible for regulating all registered brokers and brokerage firms. In accordance with FINRA Rule 2111 brokers/advisers and their firms have a responsibility to recommend suitable financial products and trading strategies based on their client’s financial interests and needs.
Investment portfolios holding large concentrated stock positions carry significant downside risks. In some cases, investors holding these positions are unable or unwilling to sell due to adverse tax consequences, company or regulatory restrictions, or emotional attachment. Brokerage firms have a duty to ensure that their customers understand the risks associated with concentration, and to disclose and recommend the availability of risk management strategies which can be used to protect the value of the concentrated portfolio. Investors can learn more about the types of risk management strategies by visiting our page linked here.
When full-service brokerage firms and their advisors fail to recommend risk management strategies to protect concentrated positions, they can be held liable in FINRA arbitration claims.
According to securities attorney Lawrence L. Klayman, “Pharmaceutical and biotechnology investments such as Sorrento Therapeutics are subject to risks that are not easily understood by investors. The risks are heightened when investors are concentrated in such investments. Brokers and financial advisors who failed to discuss the associated risks with their customers, and who failed to reasonably conduct due diligence in order to ensure that their investment recommendations were suitable, may be held responsible for any investment losses incurred.”
Investors who have experienced significant investment losses in Sorrento Therapeutics Inc. at the hands of their brokerage firm and/or financial advisor are encouraged to contact attorney Lawrence L. Klayman, Esq. at 1-888-997-9956 or lklayman@klaymantoskes.com for a free and confidential consultation to discuss recovery options and learn more about the arbitration process.
KlaymanToskes offers legal services on a contingency fee basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com