Avenue Therapeutics: Securities Investigation
Aegis Capital Corp. reportedly underwrote four offerings of Avenue Therapeutics, with a $2,608,695 offering on November 10, 2021, which has experienced a post-offering return of –99.2% as of February 28, 2024. The second offering on December 13, 2021, was for $2,024,451, which had a post operating return of -99.1%.
In October of 2022, there was an offering of $12,000,000 with a post offering return of -95.4% and in January 2023, a $3,007,463 with a post offering return of -90.2%.
According to a recent analysis by the financial economics consulting firm SLCG, many offerings underwritten by Aegis Capital were issued by nano-cap companies on the brink of delisting and bankruptcy. Over 95% of Aegis Capital’s underwritings have underperformed the average microcap stock.
Background on Avenue Therapeutics
Avenue Therapeutics, Inc. (Nasdaq: ATXI) is a specialty pharmaceutical company focused on the development and commercialization of therapies for the treatment of neurologic diseases.
According to Market Watch as of July 1, 2024, shares of ATXI are down more than –96.62% over the past 12 months.
Latest News
In April 2024, Avenue Therapeutics, Inc. (Nasdaq: ATXI) announced that it will effect a 1-for-75 reverse split of its issued and outstanding common stock. Avenue expects its common stock to begin trading on a split-adjusted basis on the Nasdaq Capital Market as of the commencement of trading on April 26, 2024 with a new CUSIP number of 05360L403. The ticker symbol for the Company’s stock will remain “ATXI.”
Risks Associated with Small Stock Offerings:
- Lack of Information: Many small companies may not provide comprehensive financial disclosures or have limited operating histories.
- Market Volatility: Small stocks can be more volatile than larger, established companies, leading to significant price fluctuations.
- Liquidity Concerns: These stocks may have low trading volumes, making it difficult to buy or sell shares at desired prices.
In addition to these risks, there are the risks associated with pharmaceutical and biotech investments. The research and development process for pharma companies often involves costly and lengthy testing trials that yield specific data. If the expected data or end points are not met, that could be bad news for investors.
Broker Responsibilities and Investor Protections
Broker dealers are required to conduct thorough due diligence on any investment they recommend and ensure that all recommendations are suitable for their clients. Firms that fail in this duty may be held liable for investor losses through FINRA arbitration claims.
If a broker or brokerage firm makes an unsuitable investment recommendation or fails to disclose the associated risks adequately, they may be found liable for investment losses in a FINRA arbitration claim. Fortunately, FINRA provides an arbitration forum for investors to resolve such disputes.
Recovery of Investment Losses
If you have suffered investment losses in Avenue Therapeutics, you may have recovery options. The securities attorneys at The White Law Group offer free consultations and can be reached at 1-888-637-5510.
About The White Law Group
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. The firm represents investors across the country in claims against their brokerage firms.
FAQ’s – Avenue Therapeutics
1. Can I sue my broker for losses in Avenue Therapeutics (ATXI)?
If your broker recommended Avenue Therapeutics without properly disclosing the risks or if the investment was unsuitable for your financial situation, you may be able to file a FINRA arbitration claim. Aegis Capital Corp. underwrote four offerings of Avenue Therapeutics, all of which have experienced severe losses—ranging from -90.2% to -99.2% as of February 28, 2024.
2. Why is Avenue Therapeutics considered a risky investment?
Avenue Therapeutics is a nano-cap pharmaceutical company, and its stock (ATXI) has experienced extreme losses—over –96% in the past 12 months. Risks include limited financial disclosure, low trading volume, high price volatility, and uncertainty related to clinical trials and FDA approvals. The company also recently completed a 1-for-75 reverse stock split in April 2024, signaling further financial instability.
3. How can I recover losses from investing in Avenue Therapeutics?
If you invested in Avenue Therapeutics based on a broker’s recommendation and experienced losses, you may be eligible to recover those losses through FINRA arbitration. The White Law Group is currently reviewing such cases and offers free consultations to determine if you have a valid claim.
