Cycurion CEO Reveals Stock Manipulation Incident and Damages Exceeding $30 Million
In a letter to shareholders, CEO Kevin Kelly, said, in part, "I want to share with you some of our current challenges and successes. The past several months have been particularly challenging. We have encountered a highly coordinated adversarial campaign aimed squarely at our company's stock prices and we are taking active measures to put a halt to that activity and to recover our damages...On March 16, an unauthorized and fabricated press release was distributed through ACCESS Newswire falsely announcing a massive fictitious acquisition by Cycurion. What followed was a coordinated manipulation of Cycurion's stock prices, and we have obtained the trading records via subpoenas. Through our lawsuit, which names ACCESS as a defendant and will eventually include the market manipulators, we have obtained records from multiple registered market makers covering trading activity in CYCU. The Short Sale Circuit Breaker triggered immediately as the market opened. At 9:30:01 AM on March 16 - before most investors could take any action - CYCU had already fallen more than 10% from the prior close. This does not happen by accident. Short selling spiked at extraordinary multiples of normal volume. Compared to pre-event daily averages, increases ranged from 33 times to over 180 times above normal daily volume in CYCU. These were pre-positioned, coordinated attacks. Spoofing activity was identified. Records from one market maker show that a third party placed hundreds of orders in CYCU on March 16 with a 100% cancellation rate, executed at nanosecond speeds. This pattern constitutes unlawful spoofing under the Dodd-Frank Act and FINRA Rule 5210 - placing orders with no intent to execute, solely to create artificial price pressure and mislead other market participants. As FINRA itself has stated, spoofing is an insidious form of market manipulation that undermines the transparency and integrity of the markets by distorting the true nature of supply and demand. We want shareholders to understand that what happened to CYCU is not an isolated phenomenon. Courts, regulators, and fellow public companies have been confronting this exact playbook with increasing frequency - and the damages being pursued in these cases illustrate the serious financial harm this conduct causes...We are actively investigating financial institutions and other parties who engaged in these activities. We have issued litigation hold letters and compiled trading evidence. We believe damages from this coordinated campaign could exceed $30M. Despite the external attack on our stock, we continue to build a fundamentally stronger company: We have reduced net debt by over 70% while maintaining solid cash reserves. We have implemented disciplined cost controls focused on profitable revenue. Our acquisitions of Secuvant and Digital Ally's Video Solutions segment are integrating and expanding our AI-powered ARx platform. Significant contract wins, combined with these acquisitions, position us to more than double our company's run-rate revenue while improving margins. The share price has been battered - I acknowledge that. But the trading evidence makes clear that this reflects a coordinated external attack, not our operational fundamentals. We are not alone in facing this - other public companies have fought back and succeeded in court. We intend to do the same."
