MediWound

Kurta Law is investigating broker recommendations of MediWound (NASDAQ: MDWD). Investment in this biopharmaceutical company. These shares are too risky for most investors. Brokers who recommended this investment may have violated FINRA Rule 2111 and Regulation Best Interest. These securities rules and regulations specify that brokers must consider their customers’ risk tolerance before recommending a security. Brokerage firms are also required to conduct their due diligence before approving a security for recommendation to their customers. Basic due diligence would reveal the high risk for investor losses associated with this investment.  

Not sure if you have a case? Contact Kurta Law for a free case evaluation. Call (877) 600-0098 or email info@kurtalawfirm.com.  

About MediWound  

According to the prospectus, MediWound is a biopharmaceutical company that is developing manufacturing, and commercializing novel therapeutics for the treatment of severe burns and connective tissue disorders. At the time of the prospectus filing, MediWound was applying for FDA approval of NexoBrid, a drug used for removing damaged tissue from severe burns. 

The Offering  

The prospectus dated September 19, 2017, announced that MediWound was offering 4,400,000 ordinary shares for $5.00 per share.  

Risk Factors  

The prospectus lists the following risk factors. Any broker who recommended shares of MediWound knew or should have known about these risks.  

Dilution as a Result of Equity Offerings  

MediWound stated that it planned to finance cash needs through future sales of equity securities or convertible debt securities, which would result in the dilution of the value of existing shares.  

Immediate Dilution of Shares 

Investors who purchased shares of MediWound would experience immediate dilution of shares. The offering price of $5.00 per share was substantially higher than the tangible book value per share of $0.05 per share at the time of the offering.  

Tax Consequences  

According to the prospectus, U.S. shareholders may suffer adverse tax consequences if MediWound is characterized as a passive foreign investment company.  

Aegis Capital Corp. Underwriting    

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help  

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.