By Sabela Ojea


A federal jury has found SCWorx's former Chief Executive Marc Schessel guilty for his participation in a scheme to mislead investors about the healthcare company's procurement of Covid-19 rapid test kits.

The jury convicted Schessel, who founded the company in 2012 and headed it until 2021, of two counts of securities fraud, the U.S. Attorney's Office of the District of New Jersey said Wednesday.

Schessel made false claims in the early days of the Covid-19 pandemic about having a binding contract to acquire millions of Covid tests from an Australian supplier, according to court documents and evidence presented at the trial, leading to a surge in the company's share price.

SCWorx and Schessel never obtained the promised Covid-test kits despite the statements, according to the documents and evidence. The company said it was ending the agreements without procuring any tests, causing its stock to crash.

Schessel wasn't immediately available for comment.

"This defendant took advantage of the global Covid pandemic by illegally pumping up the value of SCWorx's stock by over 400% with multiple fraudulent public statements," said Philip Sellinger, the U.S. attorney for New Jersey. "Duping investors out of millions of dollars in the middle of a serious health emergency to salvage a failing business is especially egregious," he added.


Write to Sabela Ojea at sabela.ojea@wsj.com


(END) Dow Jones Newswires

07-10-24 1414ET