Lunai Bioworks Sues Naked Short Sellers for Securities Fraud

Lunai Bioworks (NASDAQ: LNAI), an AI-driven precision medicine company, has filed a federal securities fraud lawsuit in Delaware, alleging that unidentified “naked” short sellers orchestrated a coordinated scheme to manipulate trading in its common stock. The lawsuit, filed by national law firms Dickinson Wright and Fox Rothschild, claims repeated violations of SEC Regulation SHO, with failures to deliver shares reaching as high as 234.6 times the maximum baseline daily rate. In some periods, failures to deliver allegedly represented 81.6% of the company’s total outstanding shares. The complaint highlights extreme trading activity, including over 554 million shares traded on March 17, 2026—15.3 times the outstanding shares—and over 100 million shares on May 4, 2026. The lawsuit seeks compensatory and special damages, injunctive relief, and recovery of legal costs. Co-lead counsel Jacob S. Frenkel of Dickinson Wright and Sidney S. Liebesman of Fox Rothschild intend to pursue expedited discovery to identify the unnamed defendants and seek emergency relief to halt ongoing manipulative trading.

Lunai Bioworks is a Delaware corporation headquartered in Sacramento, California, focused on AI-powered precision medicine. The company identifies targets for new therapeutics and biodefense countermeasures, has developed a cancer immunotherapy for solid tumors, and holds proprietary technologies that transform complex biomedical data into predictive insights. Its platforms include Augusta, an AI-powered precision neurology platform, and a portfolio targeting central nervous system disorders. Lunai also pursues federal government contracts for national security and biodefense applications. The legal action underscores the company’s commitment to protecting shareholder value and market integrity. Fox Rothschild LLP, with approximately 1,000 attorneys in 30 offices, and Dickinson Wright PLLC, with more than 500 attorneys across 23 offices, bring extensive experience in securities fraud litigation. The case has been covered by InvestorWire, a specialized communications platform within the Dynamic Brand Portfolio @ IBN, which syndicates press releases to 5,000+ outlets and reaches millions via social media.