ChromaDex retail investors thought they were at the amusement park boarding The Rocket!
But instead we ended up on the Litigation Ride, which just shakes you around then slams you on the ground repeatedly.
Meanwhile, nearby on The Rocket, they are using regular gasoline instead of rocket fuel, so fire comes out the bottom but it doesn't go up. It isn't even noisy. It just sits there.
It's all very disorienting.
But the most disorienting part is the Trolls that narrate the journey. All gloom and doom, they appear -- unbidden and anonymous -- mere disembodied voices on the Yahoo Finance Board, like the Ghost Host in the Haunted Mansion.
But the Trolls' apparent purpose is to deceive investors, which I think might not be legal.
It is not illegal to make a mistake in a public forum, and maybe not even to recklessly and repeatedly be wrong about things in a public forum.
But a pattern of deceptions suggests bad intent, and if there were a nefariously conceived plan to destroy a publicly traded company, and if one part of that plan were to manipulate the share price by "disseminating untrue information to investors," as ChromaDex alleged in its New York complaint, and if trolls associated with Elysium are in fact targeting ChromaDex investors with false negative information, you'd think there might be legal implications.
Here are three examples, just from this week:
1. This Forum's Resident Legal Advisor
Chuck the Troll, who is the subject of this month's Troll Missive, likes to call me the "resident legal advisor" for the Yahoo Finance ChromaDex forum.
There is no resident legal advisor -- I don't have a professional relationship with either Yahoo Finance or with any of the forum participants. And even though the Troll has been constantly reminded of this by me and by others for months:
He nonetheless persists in attempting to mislead the forum's small group of participants, and likely much larger group of silent observers, into believing that there is a legal advisor helping them, instead of just a fellow retail investor and journalist-blogger covering the litigation.
This is beyond irresponsible, and it is not the only example of intentional deceit by these trolls.
2. Failure to Challenge the Covance Litigation
This week the Troll also said that I broke my "promise to monitor" the Labcorp litigation, and that "ChromaDex failed to submit a motion dismissing the [Covance] complaint this week so it is not even attempting to challenge the lawsuit at this point..."
That's just so weird! I DID say I would "keep an eye on" that lawsuit:
Which I did do. I even posted an update on the Facebook forum a few days ago:
And I also posted the new documents on my blog, so there's no broken promise.
But the Troll's false accusation against me is not the weird part -- it's the false accusation against ChromaDex.
The lawsuit involves the sale of ChromaDex's testing unit to Covance (which was owned by LabCorp). You can read the docket yourself right here. ChromaDex answered the complaint on February 4th. On February 5th the case was referred to the Magistrate Judge Sherry Fallon "for all purposes through the case dispositive motion deadline," and a scheduling conference was set for February 25th.
The weird part is the Troll's statement that "ChromaDex failed to submit a motion dismissing the complaint this week, so it is not even attempting to challenge the lawsuit at this point."
In what moral universe has ChromaDex failed "to challenge the lawsuit" in the same week that it answered the complaint and denied liability?
And in what legal universe must motions to dismiss be filed before there is even a scheduling order that would make a dispositive motion untimely?
The Troll's comments about ChromaDex aren't just false, they are utterly baseless -- and therefore the Troll's gratuitous attack on management was also unfounded.
At least that is what you would conclude based on the public docket.
Maybe instead the Troll is in actual contact with legal counsel and has learned off the record that ChromaDex isn't going to file a Motion to Dismiss because the pleadings appear well-crafted, and instead ChromaDex intends to file a Motion for Summary Judgment based on the actual evidence?
If that were true, I would be REALLY interested to know who is sharing non-public legal calendar information with the Troll, and with which clients' approval.
But that STILL would not make the Troll's assertions about ChromaDex true -- if anything, they would be even more calculatedly misleading.
3. Customer Attacking Accuracy of ChromaDex Testing
Also this week: The Troll said, "[I found] a lawsuit against a ChromaDex Niagen customer attacking the accuracy of ingredient testing done by ChromaDex."
Well that's not what the Troll found at all.
I followed the link through to the press release, and then retrieved the actual complaint in the case, and it does not say that. There is no one besides the Troll attacking the accuracy of ingredient testing done by ChromaDex.
The allegation in the case is that supplements provider BPI sold substances that were not the same as what the label claimed, and the label also claimed that the ingredients were verified by a ChromaDex lab. Here is ThermoLife's complaint against BPI:
BPI has dominated the BCAA market for years by lying to consumers about the bonded nature of its BCAAs as well as the quantity of BCAA’s included in its products. And BPI’s lies have been propped up by its claim that all of its advertising and label claims were verified by an independent lab, ChromaDex...
Far from being “verified by ChromaDex”, as BPI’s advertising and product labels claim, BPI’s advertising and product labels have now been proven false.
Ironically, BPI’s lies were proven by the same laboratory that BPI claims verified BPI’s label claims. ChromaDex was purchased by Covance in August 2017. It was Covance (who now owns ChromaDex) that independently tested BPI’s products for ThermoLife and proved BPI’s lies.
The complaint is not attacking the accuracy of ingredient testing done by ChromaDex; it is attacking BPI for using ChromaDex's certification on ingredients that allegedly should not be certified.
Just to be very clear that this is not an attack on ChromaDex or on "the accuracy of ChromaDex's ingredient testing,"
(1) ChromaDex is not a defendant in the action
(2) ThermoLife's claim is for false advertising, not fraudulent testing
(3) ThermoLife recounts ChromaDex's good reputation
(4) ThermoLife chose ChromaDex to do the testing that it is relying on in the complaint
We have no idea what actually happened. It is of course possible that Chromadex entered into a conspiracy with BPI to falsely certify non-conforming product, and then ChromaDex subsequently revealed its own prior deceit to ThermoLife.
But that is not what the complaint alleges.
The complaint stops short of accusing ChromaDex of inaccurate testing, and for good reason. Assuming the allegations in the complaint are true, Occam's Razor would suggest that the simplest explanation would be that BPI's goods were conforming to the certification when tested, but subsequent product was non-conforming. It is much simpler to posit that the goods were changed after testing than to posit a conspiracy in which ChromaDex provides inconsistent certifications for the same product.
That obvious interpretation was immediately presented to the Troll by Mike, who wrote, "BPI can always switch the product after testing. ChromaDex has no responsibility..."
And Walt said, "This is not that hard to read. ChromaDex is not involved..."
But the Troll said, "At best, ChromaDex sat back and let BPI Sports sell a fake product that it supposedly verified without objecting. At worst, ChromaDex actually falsified the results..."
That is an absurd legal theory. A company that provides a testing certification for a sample is certainly not obligated to proactively provide ongoing guaranties to third-party customers that subsequent product that it did not test remains conforming.
Anyway, again, we don't know what happened. We don't know if ChromaDex botched the original testing, or if BPI subsequently swapped in adulterated product, or if Covance botched the subsequent testing, or if the entire complaint is mistaken and none of this happened.
All we know is that the complaint does NOT attack the accuracy of ingredient testing done by ChromaDex, contrary to what the Troll asserts. It's pretty clear in the complaint that the ThermoLife's suspicions are aimed at BPI, not at the very same lab that ThermoLife relied on to establish its grounds for the lawsuit.
And because some of these facts were brought to the Troll's attention and he STILL asserted that complaint showed bad behavior by ChromaDex, this should be viewed as yet another calculated attempt to mislead investors about ChromaDex, rather than just an off-hand, thoughtless comment.
Conclusion
It remains a mystery why anonymous agents with an apparent allegiance to Elysium attempt to harass and mislead ChromaDex retail investors. Perhaps we will never know who is doing this or why.
Or perhaps Shakespeare was right that the world is a stage and we are all in the play, and Elysium's nefariously conceived plan is not a story distant from us in space and time, but a reality in which we are immersed every day. Time will tell.
UPDATE: FEB 26, 2019
Chuck-the-Troll today committed a particularly egregious act of posting recklessly false information on the ChromaDex investor forum for Yahoo Finance. The Troll characterizes Mark Germain as a "current BOD member," and then goes on to describe Germain's alleged entanglement's with the Honig crowd. You can read it below. The problem? Germain is not a current BOD member. Germain left ChromaDex's board of directors almost three years ago, in April 2015.
