Nano-x Imaging Ltd. and Ran Poliakine
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25876 /September 29, 2023
Securities and Exchange Commission v. Nano-x Imaging Ltd. and Ran Poliakine, No. 1:23-cv-8611 (S.D.N.Y filed September 29, 2023)
SEC Charges Diagnostic Imaging Company and its former CEO for misrepresenting the manufacturing costs of its flagship device.
The Securities and Exchange Commission today announced charges against an Israel-based diagnostic imaging company, Nano-X Imaging Ltd. (“Nanox”), and its former CEO, Ran Poliakine (“Poliakine”), for negligently misrepresenting the cost to manufacture the company’s flagship imaging device, the Nanox.ARC. Nanox and Poliakine have agreed to settle the SEC’s charges.
The Commission’s complaint alleges that from August 2020 to May 2021, Nanox and Poliakine claimed the company could mass-produce the Nanox.ARC – a purported low-cost alternative to existing X-ray devices – for $8,000 to $12,000 per unit. According to the SEC, Poliakine ignored higher alternative cost estimates provided by company executives, including engineering executives, while touting the lower manufacturing costs. The complaint alleges that Nanox included this misleading cost estimate in reports filed with the Commission prior to raising $165 million in an initial public offering. The company continued to include the estimate in subsequent financial filings, and Poliakine repeated this estimate in numerous earnings calls and media interviews.
The Commission’s complaint, filed in U.S. District Court for the Southern District of New York, charges Nanox with violating Section 17(a)(2) of the Securities Act of 1933 (“Securities Act”) and Section 13(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 12b-20 and 13a-1 thereunder, and Poliakine with violating Section 17(a)(2) of the Securities Act and aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Without admitting or denying the SEC’s allegations, Nanox and Poliakine have consented to the entry of a final judgment that imposes permanent injunctions; orders Nanox and Poliakine to pay civil penalties of $650,000 and $150,000, respectively; and orders Poliakine to pay $266,836.39 in disgorgement plus prejudgment interest. These settlements are subject to court approval.
The SEC’s investigation was conducted by Jillian Harris and Ayesha Ahmed of the SEC’s Fort Worth Regional Office, under the supervision of Jim Etri and Eric Werner. The litigation will be led by Jason Rose and supervised by B. David Fraser.