Lunai Bioworks Files Securities Fraud Lawsuit Alleging Naked Short Selling

Lunai Bioworks, Inc. (NASDAQ: LNAI) has initiated a federal securities fraud lawsuit in Delaware, alleging that unidentified naked short sellers engaged in a coordinated scheme to manipulate trading in the company's common stock. The lawsuit, filed by national law firms Dickinson Wright and Fox Rothschild, claims repeated violations of SEC Regulation SHO, including failures to deliver shares that reached as high as 234.6 times the maximum baseline daily rate. According to the complaint, these failures to deliver represented 81.6% of the company's total outstanding shares during certain periods.

The complaint details specific trading activity that allegedly exceeded Lunai's available share count. On March 17, 2026, more than 554 million shares were traded, representing 15.3 times the company's outstanding shares. Similarly, over 100 million shares were traded on May 4, 2026. The lawsuit seeks compensatory and special damages, injunctive relief, and recovery of legal costs. Legal counsel stated they intend to pursue expedited discovery to identify the unnamed defendants and seek emergency relief to halt any ongoing manipulative trading.

Lunai Bioworks is an AI-driven platform for precision medicine headquartered in Sacramento, California. The company identifies targets for new therapeutics and biodefense countermeasures, and has developed a cancer immunotherapy for solid tumors along with proprietary technologies that transform complex biomedical data into predictive insights. Its platforms include Augusta, an AI-powered precision neurology platform, and a portfolio focused on central nervous system disorders. The company also pursues federal government contracts in support of national security and biodefense applications through its AI platform.

The full press release is available at https://ibn.fm/XFOLP. Investors and market participants are closely watching this case, as it highlights ongoing concerns about naked short selling and market manipulation in small-cap stocks. The outcome could have implications for regulatory enforcement and corporate governance practices.