Case Background
Vaxart, Inc. was a clinical-stage biotechnology company headquartered in South San Francisco, California. The company focused on developing oral vaccines delivered as tablets rather than injections for various diseases including influenza and COVID-19. As of early 2020, Vaxart had only 14 full-time employees, no approved drugs or vaccines on the market, and a market capitalization of just $17 million. Its stock traded at around 35 cents per share at the start of the year.
Armistice Capital LLC, a New York-based hedge fund focused on the healthcare sector, was Vaxart's largest and most powerful shareholder. Armistice, founded in 2012 by Steven J. Boyd, acquired a controlling stake in Vaxart in late 2019. As part of that investment, Armistice also held warrants essentially the contractual right to purchase millions of additional Vaxart shares at deeply discounted prices in the future. Two Armistice executives joined Vaxart's board of directors as part of the deal: Boyd himself, who served as Armistice's chief investment officer and managing member, and Keith Maher, a managing director at the fund.
When the COVID-19 pandemic swept across the United States in early 2020, the federal government launched Operation Warp Speed, a national initiative designed to fast-track the development and mass production of COVID-19 vaccines by committing billions of dollars to a select group of pharmaceutical companies. The program generated enormous investor excitement, and biotech stocks tied to vaccine development saw dramatic price increases across the market.
Vaxart moved quickly to capitalize on that excitement. The company began working on an orally administered COVID-19 vaccine candidate and issued a series of positive updates throughout the spring of 2020. Those announcements pushed Vaxart's stock from 35 cents at the start of the year to over $3 per share by early June 2020 roughly a tenfold increase in just a few months.
Behind the scenes, the board was also busy. On June 8, 2020, Vaxart's board which included Boyd and Maher voted to amend the terms of Armistice's existing warrant agreements. The original agreements restricted how quickly Armistice could exercise its warrants, requiring the fund to buy and sell shares in smaller batches. The amendments removed those restrictions, allowing Armistice to immediately exercise warrants on approximately 21 million Vaxart shares all at once rather than gradually over time. Around the same period, the board also approved millions of dollars in stock options for Vaxart's senior executives and directors, with strike prices well below where the stock was then trading.
On June 14, 2020, Vaxart replaced its longtime CEO Wouter Latour with Cezar Andrei Floroiu, a former Armistice analyst who also previously worked alongside Boyd at the consulting firm McKinsey & Company. These boardroom moves set the stage for what followed in the final days of June 2020 two press releases that triggered a dramatic spike in Vaxart's stock price and became the center of this lawsuit.
Investors who bought Vaxart shares during that spike later filed a class action lawsuit in the Northern District of California, arguing they were deceived. The case was assigned to Judge Vince Chhabria and eventually consolidated into a single class action representing all investors who purchased Vaxart securities between June 25 and July 25, 2020. After more than five years of litigation including motions, discovery, and a full trial the jury returned its verdict on April 28, 2026.
Cause
On June 25, 2020, Vaxart issued a press release announcing a manufacturing agreement with Attwill Medical Solutions Sterilflow, LP. The announcement implied the company was on track to produce over a billion COVID-19 vaccine doses annually. Vaxart's stock nearly doubled that day, closing at $6.26 per share after opening at $3.61.
The next day, on June 26, 2020, Vaxart issued a second press release titled "Vaxart's COVID-19 Vaccine Selected for the U.S. Government's Operation Warp Speed." The announcement stated that its oral COVID-19 vaccine was selected to participate in a non-human primate study organized and funded by Operation Warp Speed. The wording strongly implied that Vaxart was among the elite companies receiving substantial federal funding for mass vaccine production. The stock hit a high of $14.30 that day before closing at $8.04.
Armistice moved immediately. Between June 26 and June 29, 2020 just two trading days the fund exercised all its warrants and sold approximately 27.6 million Vaxart shares. It cut its ownership stake from roughly 29% down to just 0.2% and walked away with profits of approximately $267 million.
Plaintiffs argued that the warrant amendments approved on June 8 weeks before the press releases were not routine board business. They said the amendments were a deliberate setup, engineered so that Armistice could cash out at peak prices the moment the press releases drove the stock high enough.
Injury
The truth came out on July 25, 2020, when The New York Times published an article titled "Corporate Insiders Pocket $1 Billion in Rush for Coronavirus Vaccine." The piece revealed that Vaxart was not among the companies selected to receive significant financial support from Operation Warp Speed. A senior Department of Health and Human Services official confirmed that Vaxart's vaccine only participated in a preliminary government study to explore whether a partnership might be possible no funding agreement existed and no determination had been made.
When the market processed this news, Vaxart's stock dropped from $12.29 to $11.16 on July 27, 2020, and continued to fall in the weeks that followed. Investors who bought shares during the inflated run-up between June 25 and July 25 suffered real and measurable financial losses.
Damages Sought
Plaintiffs sought to recover all losses suffered by investors who purchased Vaxart securities between June 25 and July 25, 2020, at prices they argued were artificially inflated by the Defendants' misleading statements and conduct, plus interest, attorneys' fees, and all other relief the Court deemed appropriate.
Key Arguments and Proceedings
Legal Representation
Plaintiff: Kirk Himmelberg | Ani Hovhannisyan | Wei Huang | Langdon Elliott | Najaf Zaidi | Phillip Chan | Wei Huang
· Counsel for Plaintiffs: Reed R. Kathrein | Lucas E. Gilmore | Jeffrey P Jacobson | Jessica M. Casey | Jimmy S. McBirney | John T. Jasnoch | Mandeep S Minhas | Rhiana Swartz | William C. Fredericks | Danielle Smith | Heather Volik
Defendants: Steven J. Boyd | Keith Maher | Armistice Capital LLC | Armistice Capital Master Fund Ltd | Vaxart Inc | Cezar Andrei Floroiu | Wouter W. Latour M.D., and others
· Counsel for Defendants: Neal R. Marder | Joshua A. Rubin | Sina Safvati | Brian Lanciault , Jr | Menachem M. Piekarski | Riccardo Mauro DeBari | Daniel P. Martin | Jonathan Acker Shapiro | Nicole J Kim | Karan Singh Dhadialla | Renee Michele Zaytsev | Stella Padilla | Ali R. Rabbani | Charles F. Connolly | David M. Giller | James E. Tysse | Josh Andrew Samuel Rubin | Kaitlin Dabbert Shapiro | Lillian Rand | Stacey H. Mitchell | Stephanie Ondrof | Miranda Kane | Warren Metlitzky | Nathan Theobald and others.
Key Arguments by Counsel
Plaintiffs argued that the Defendants ran a textbook pump-and-dump scheme. They said Vaxart and the Armistice-connected Defendants deliberately issued misleading press releases to drive up the stock price, giving Armistice the window it needed to sell hundreds of millions of dollars in shares before investors realized the Operation Warp Speed announcement was overstated. Plaintiffs pointed to the timing of the warrant amendments and stock option grants all approved just weeks before the market-moving announcements as clear evidence of a coordinated plan to profit at ordinary investors' expense.
Defense attorneys for Boyd and Maher pushed back firmly. They argued that their clients never made any false statements and never participated in any scheme to deceive investors. They said Vaxart's vaccine did genuinely participate in a government-organized non-human primate study connected to Operation Warp Speed, and that the press release accurately reflected that fact. Counsel maintained that Boyd and Maher acted as responsible directors in good faith, relying on the company's management, lawyers, and other advisors in approving board actions. They also argued that any losses Plaintiffs suffered resulted from broader market forces, not from anything their clients did.
Claims
Scheme to Defraud
Plaintiffs alleged that the Defendants engaged in a coordinated scheme under Rule 10b-5(a) and (c) of the Securities Exchange Act to artificially pump up Vaxart's stock price through misleading press releases and carefully timed board actions — warrant amendments and stock option grants — so that Armistice could dump its shares at peak prices before the truth emerged.
Misrepresentations and Omissions
Plaintiffs argued that the June 25 and June 26 press releases contained materially false and misleading statements. Specifically, they said the Operation Warp Speed announcement created the false impression that Vaxart was among the companies receiving substantial government funding and support for mass vaccine production, when in reality it only participated in a small preliminary study with no funding attached.
Insider Trading
Plaintiffs separately alleged that Boyd, Armistice Capital LLC, and Armistice Capital Master Fund Ltd. traded on material non-public information when they exercised warrants and sold Vaxart shares between June 26 and June 29, 2020, reaping hundreds of millions in profits while ordinary investors bought in at inflated prices.
Control Person Liability
Under Section 20(a) of the Exchange Act, Plaintiffs argued that Boyd, Maher, and other senior figures who controlled Vaxart's communications and operations bore personal liability for the company's false and misleading statements.
Defense
Boyd and Maher denied every allegation. They maintained that the board's approval of warrant amendments and stock option grants was routine corporate business conducted in the best interests of Vaxart and its shareholders. They argued that Vaxart's press releases were accurate, that neither Defendant made any materially false statement, and that no evidence supported the theory that they participated in any fraudulent scheme. They also raised defenses including lack of fraudulent intent, no loss causation, reliance on professional advice, and the safe harbor provisions of the Private Securities Litigation Reform Act for forward-looking statements.
Jury Verdict
The jury returned its verdict on April 28, 2026, after more than five years of litigation.
On the scheme-to-defraud claim, the jury found that Plaintiffs failed to prove their case against either Keith Maher or the group of Boyd, Armistice Capital LLC, and Armistice Capital Master Fund Ltd. Both received a "No" verdict on that claim.
On the separate insider trading claim against Boyd, Armistice Capital LLC, and Armistice Capital Master Fund Ltd., the jury again ruled in the Defendants' favor, finding that Plaintiffs did not prove insider trading occurred.
The verdict was a complete win for the defense on both claims tried to the jury. The jury did not reach the damages or apportionment questions, as those sections of the verdict form only applied if liability was established. Boyd, Maher, and the Armistice entities left the Courtroom without any liability attached to their names.
Court documents are available upon request at [email protected]
