CEO of North Jersey Biotechnology Company Admits Violating Securities Laws
NEWARK, N.J. – The president and CEO of Proteonomix Inc., a biotechnology company in Paramus, New Jersey, today admitted misleading the U.S. Securities and Exchange Commission (SEC) about his business dealings with his father-in-law, U.S. Attorney Paul J. Fishman announced.
Michael M. Cohen, 49, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of certifying false statements with the SEC.
According to documents filed in this case and statements made in court:
Proteonomix performed stem cell research and developed cosmeceutical products. Cohen’s father-in-law was the president of Nancyco of NY Inc., Joe & Sam of New York Inc., Mollyco of NY Inc., and JSMNM Inc. (collectively, the “FIL Companies”) that purportedly performed work for Proteonomix in exchange for Proteonomix shares.
As the president, CEO, and chief financial officer for Proteonomix, Cohen was required to accurately disclose the company’s financial information to the investing public. SEC regulations require disclosure of “related-party transactions” involving immediate family members with a direct or indirect material interest. Cohen admitted he exercised control over the FIL Companies’ bank and brokerage accounts and failed to disclose they were related parties under SEC regulations. In a September 2012 filing with the SEC, Proteonomix and Cohen knowingly failed to disclose that an agreement between Proteonomix and Mollyco, in which $2 million in debt was converted into shares of Proteonomix stock, was a related-party transaction.
The false statements count to which Cohen pleaded guilty carries a maximum potential penalty of 10 years in prison and a $1 million fine. Sentencing is scheduled for May 27, 2015.
The SEC today filed a civil complaint against Cohen.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and SEC’s Division of Enforcement, under the direction of Associate Director Antonia Chion, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Economic Crimes Unit in Newark.
Defense counsel: Jacob Frenkel Esq., Baltimore, Maryland.