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Cellceutix Corp (OTCMKTS:CTIX) is an interesting story, where basically a short seller wrote a damaging article on Seeking Alpha, who had zero credibility, and then CTIX tanked. The information was totally false, but shares took a long time to recover and get footing as investors were spooked and exited like the wind.

Logically the company fought back against the fraudulent news from the short seller and went after the law firm who backed the false information. Unfortunately the judge did not level any sanctions against the law firm. A New York federal judge declined to impose sanctions against the Manhattan based Rosen Law firm after they pursued a failed fraud case against Beverly-based Cellceutix based in part on negative blog posts written by an anonymous short-seller. The complaint was filed in September 2015, about one month after the investor website Seeking Alpha published an article about Cellceutix by a short seller using the pseudonym Mako Research. The article questioned the scientific basis of Cellceutix’s drugs and said that it appeared to be a “shell company” run out an empty office building.

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