Kasowitz, on Behalf of Scilex Holding Company, Files Federal Securities Fraud Lawsuit Seeking Recovery of Approximately 96 Million Misappropriated Datavault AI, Inc. Shares

Kasowitz has filed a lawsuit on behalf of Scilex Holding Company (“Scilex”), an innovative revenue-generating company focused on acquiring, developing, and commercializing non-opioid pain management products, in the United States District Court for the Central District of California against Marc Wade, The St. James Bank & Trust Company Ltd. (“St. James Bank”), Omega & Corinth Group Ltd., and related parties (collectively, the “Wade Defendants”), alleging a scheme involving the unauthorized transfer and sale of approximately 96 million Datavault AI, Inc. (“Datavault”) common shares (“DVLT”) that were pledged as collateral in a stock loan transaction (the “Pledged DVLT Shares”).  The lawsuit also names The Bank of New York Mellon Corporation (“BNY Mellon”) for its alleged role in opening and administering brokerage accounts through which the Pledged DVLT Shares were allegedly improperly transferred and traded.  

As alleged in the complaint, in late 2025, Scilex entered into a stock loan agreement with St. James Bank (the “Loan Agreement”), pursuant to which Scilex pledged Datavault shares as collateral.  Under the Loan Agreement, the pledged securities were to be held as collateral and were not authorized to be sold or otherwise disposed of unless certain contractual conditions occurred.  Approximately 96 million shares of Datavault stock were transferred as collateral under the Loan Agreement.  The complaint further alleges that, rather than safeguarding the Pledged DVLT Shares, the Wade Defendants transferred the shares into brokerage accounts at BNY Mellon and systematically sold them into the public market without authorization, using the proceeds to fund the loan and generate profits.

The complaint also alleges that St. James Bank repeatedly and falsely represented to Scilex that the Pledged DVLT Shares had not been transferred or sold.  Scilex learned that the Pledged DVLT Shares were transferred into brokerage accounts which Scilex had never opened or authorized at BNY Mellon and subsequently sold.  The complaint alleges that the large volume of trading activity involving the Pledged DVLT Shares significantly impacted the market price of DVLT shares, causing substantial financial harm to Scilex.  

The complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, along with claims for state law securities fraud, fraudulent inducement, conversion, and negligence.  Scilex is seeking recovery of the Pledged DVLT Shares, compensatory damages exceeding $100 million, punitive damages, disgorgement of profits, and other relief.

The Kasowitz team representing Scilex is led by partners Marc E. Kasowitz, Ronald R. Rossi, and Daniel J. Koevary, and includes partners Daniel A. Saunders and Robert W. Bosslet, and associates Dwayne A. Amos, Brittany F. Alzfan and Daniel M. Furey.