Soleno Faces Fraud Lawsuit After Stock Collapses 40%

Edgen Stock·Mar 30 2026, 17:22

Share to

Share to

Copy link

Key Takeaways

Soleno Therapeutics is the target of a class-action lawsuit alleging securities fraud after the company's stock value cratered. The suit claims Soleno concealed significant safety risks for its Prader-Willi syndrome drug, DCCR, leading to a series of catastrophic price drops as the information became public. Investors now have a deadline to seek lead plaintiff status.

Securities Fraud Allegations: Soleno is accused of systematically misrepresenting and concealing safety concerns, including fluid retention issues, related to its key drug candidate, DCCR.
Stock Plummets 40%: A series of disclosures beginning in August 2025, including a critical report and a patient death, sent the stock from over $77 to $47 by November 2025.
May 5, 2026 Deadline: Investors who purchased SLNO stock between March 26, 2025, and November 4, 2025, have until May 5, 2026, to file a motion to be appointed lead plaintiff in the lawsuit.

Short-Seller Report Sparks 12% Stock Decline

Soleno Therapeutics' (NASDAQ: SLNO) stock began its steep descent after Scorpion Capital LLC published a critical report on August 15, 2025. The report accused the company of using suspect data and running sham clinical trials for its Prader-Willi syndrome (PWS) drug, DCCR. The complaint alleges the report detailed serious safety concerns and interviews with trial investigators and parents who documented severe harm to their children. This news drove Soleno's stock down nearly 12%, falling from a high of more than $77 per share on August 14 to close at approximately $68 two trading days later on August 18.

Patient Death, Poor Launch Data Trigger 27% Plunge

The negative momentum accelerated through the fall. On September 10, 2025, Soleno disclosed in a regulatory filing that a patient taking DCCR had died, causing the stock to drop another 19% over two days from $70 to roughly $57 per share. The final blow came on November 4, 2025, when Soleno reported its third-quarter financial results. The company's CEO acknowledged that the Scorpion Capital report had created a “disruption” in DCCR's launch, leading to fewer new patients and increased discontinuations. On this news, Soleno's stock collapsed approximately 27% in a single day, dropping from nearly $64 to close at $47 on November 5, 2025.

Investors Face May 5 Lawsuit Deadline

Multiple law firms are now reminding investors of the May 5, 2026, deadline to file for lead plaintiff status in the resulting class-action lawsuit. The suit alleges that Soleno and its executives violated federal securities laws by failing to disclose that the DCCR clinical trial program concealed significant safety risks. The complaint argues these omissions gave a false impression of the drug's commercial viability. The class period covers investors who purchased SLNO common stock between March 26, 2025, and November 4, 2025, a period during which the lawsuit claims the stock price was artificially inflated.