SEC v. Revolutions Medical Corp. and Rondald L. Wheet, Case No. 1:12-cv-03298-TCB (N.D. Ga.). On September 21, 2012, the SEC announced charges against Revolutions Medical Corp. (“Revolutions Medical”) and its CEO, Rondald L. Wheet (“Wheet”). The case concerns Revolutions Medical’s and Wheet’s efforts to increase the company’s stock price through false press releases and statements about a retractable, medical safety syringe. For about a year, the Defendants issued releases that made is appear as though the development of a safe and effective syringe was final, that the syringe was ready for manufacture and distribution, and that Revolutions Medical was close to finalizing mass distribution agreements, including a sales deal with the Department of Defense. In reality, the development of the syringe was not that far along in that it was not close to manufacture or distribution and there were no imminent sales or distribution agreements. Through the releases, Defendants inflated the company’s stock price and thus was also able to raise funds more cheaply through an equity financing agreement with hedge funds.
The SEC charged Defendants with violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC also alleges that Wheet aided and abetted certain of Revolutions Medical’s violations. The SEC is seeking injunctive relief, disgorgement and civil monetary penalties.