Signal Genetics

Kurta Law is investigating broker recommendations of Signal Genetics (NASDAQ:SGNL). Shares were high-risk, and brokers may have violated securities rules and regulations. The prospectus clearly states, “Our business and an investment in our securities involves a high degree of risk.” Brokers are required by Regulation Best Interest to consider their broker’s risk tolerance and to exercise care and skill with their recommendations. Investors who specified that they wanted conservative or moderate-risk investments should not have Signal Genetics investments in their portfolios.  

If you have concerns about your broker’s recommendations, call (877) 600-0098 or email info@kurtalawfirm.com.  

About Signal Genetics  

According to the prospectus, Signal Genetics is an emerging, commercial-stage molecular diagnostic company that focuses on diagnostic services for cancer patients.  

The Offering  

In the prospectus dated June 17, 2014, Signal Genetics announced it was offering 850,000 shares of common stock for $10.00 per share.  

Risks Associated with Shares of Signal Genetics  

The prospectus clearly states the following risks. Brokers either knew or should have known about the following risks.  

Early-Stage Company 

As an early-stage company, Signal Genetics was subject to all the usual risks facing companies with limited operating history. At the time of the prospectus, it had a history of losses and expected to incur net losses in the future. In fact, the prospectus admits that there is a possibility that it may never become profitable.  

Additional Financing 

Signal Genetics may need additional financing to meet its liquidity requirements.  

Required License or Certification  

Signal Genetics requires a certain certificate to perform its lab tests. If that certificate were to be lost, suspended, or restricted, the company’s ability to develop its product would be stymied.  

Small Number of Clients  

According to the prospectus, a small number of test ordering sites accounted for most of the company’s business. If they were to order fewer tests for any reason, it would negatively impact the business.  

Commercialization Efforts  

Signal Genetics’ success depends on its ability to successfully develop and commercialize novel cancer diagnostic tests and services. Its development efforts could fail.  

Collaborations  

The business depended on certain collaborations with third parties for the supply of tissue samples that it used in its research and development efforts. If the costs of those supplies increase, the business would be materially harmed.  

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.