Key Takeaways
ADMA Biologics Inc. is under investigation by Rosen Law Firm for potential securities claims after a short-seller report alleging revenue manipulation wiped 29 percent off the company’s stock price in March.
"The results of an investigation into allegations that ADMA Biologics may have issued materially misleading business information to the investing public," Rosen Law Firm announced on April 30.
The probe follows a March 24 report from Culper Research that accused ADMA of using a "channel stuffing" scheme to show 20 percent revenue growth in 2025, when it should have reported a 3 percent decline. The stock fell from $13.59 on March 23 to $9.63 two days later.
The investigation by Rosen, a firm specializing in shareholder rights, could lead to a class-action lawsuit seeking to recover losses for investors. This adds to the pressure on ADMA, which saw its stock fall a further 13.9 percent on March 26 after a downgrade from Cantor Fitzgerald.
The allegations center on a report from investigative firm Culper Research, which claimed ADMA induced a distributor to stock excess inventory of its flagship product, ASCENIV. This practice, known as channel stuffing, allegedly allowed ADMA to book revenue and report growth that wasn't supported by actual demand.
Following the report, ADMA's stock fell $2.26, or 16.6 percent, on March 24. The decline continued after Cantor Fitzgerald downgraded the company's rating, citing a disappointing response from management to the allegations. The stock closed at $8.29 on March 26.
Several other law firms, including Bleichmar Fonti & Auld LLP and Pomerantz LLP, have also announced investigations into the company for potential securities fraud.
The multiple law firm investigations signal a coordinated legal challenge that could result in significant financial liability for ADMA Biologics. Investors will be watching for the company's formal response to the allegations and any preliminary court filings.
This article is for informational purposes only and does not constitute investment advice.
