Soleno Therapeutics Faces Investigation: Allegations of Misleading Investors – What Are Your Rights?

Soleno Therapeutics Faces Investigation: Allegations of Misleading Investors – What Are Your Rights?

Did you invest in Soleno Therapeutics (NASDAQ: SLNO) and experience financial losses? Recent investigations into potential securities violations have raised concerns about misleading statements and a lack of transparency from the company. If you’re an investor, it’s crucial to understand your rights and the legal options available to you. In this blog post, we’ll break down the situation, explain the allegations, and outline what steps you can take to protect your investments.

What’s Happening with Soleno Therapeutics?

Several law firms have launched investigations into Soleno Therapeutics, focusing on potential violations of U.S. federal securities laws. These investigations center around allegations that Soleno and its executives may have made misleading statements or failed to disclose critical information to investors.

Why is this happening?

The concerns stem from a few key events:

  • VYKAT XR Discontinuations: During a quarterly earnings call on November 4, 2025, Soleno revealed that approximately 8% of patients discontinued using VYKAT XR due to adverse effects by the third quarter.
  • Impact of Short Seller Report: Soleno’s CEO, Anish Bhatnagar, admitted that a short seller report released in August 2025 had negatively impacted the launch of VYKAT XR, leading to fewer new prescriptions and increased discontinuations due to non-serious adverse events.
  • Stock Price Decline: Following these disclosures, Soleno’s stock price plummeted, causing significant losses for investors. On November 5, 2025, the stock price fell by more than 26%.

These events have triggered scrutiny from law firms and raised questions about whether Soleno adequately informed investors about the risks and challenges associated with VYKAT XR.

The Allegations: What Did Soleno Therapeutics Do Wrong?

The core allegations against Soleno Therapeutics revolve around potentially misleading investors regarding the safety and commercial prospects of VYKAT XR, its only FDA-approved product.

Here’s a breakdown of the specific claims:

  • Misleading Statements: It’s alleged that Soleno made overly optimistic statements about VYKAT XR’s market readiness, momentum, and safety profile between February 27, 2025, and August 15, 2025.
  • Omission of Adverse Events: The company is accused of failing to disclose adverse events and potential risks associated with VYKAT XR, despite FDA warnings about fluid overload and heart risks.
  • Data Integrity Concerns: Questions have been raised about the integrity of data from Soleno’s clinical trials, with suggestions that company insiders may have been aware of or recklessly disregarded these issues.

These allegations paint a picture of a company potentially prioritizing positive messaging over transparency, which could have led investors to make decisions based on incomplete or inaccurate information.

The Role of the Scorpion Capital Report

A significant catalyst for the investigations was a report published by Scorpion Capital in August 2025. This report made several serious claims:

  • VYKAT XR Safety Concerns: Scorpion Capital alleged that VYKAT XR was overpriced and potentially unsafe for children, citing reports of hospitalizations for heart failure following treatment.
  • Questionable Launch Metrics: The report challenged the integrity of Soleno’s launch data, suggesting that positive metrics were potentially misleading.
  • Clinical Trial Integrity: Scorpion Capital questioned the validity of Soleno’s clinical trials, alleging that they were a “sham” and citing concerns about data and trial practices.

The Scorpion Capital report amplified existing concerns about Soleno and triggered a wave of investigations by law firms on behalf of investors.

What Are Your Rights as an Investor?

If you invested in Soleno Therapeutics and suffered financial losses, you have certain rights and potential legal options:

  • Securities Class Action Lawsuit: You may be able to participate in a securities class action lawsuit against Soleno Therapeutics. These lawsuits aim to recover losses for investors who were harmed by the company’s alleged misconduct.
  • Right to Information: You have the right to access information about the investigations and any potential legal proceedings.
  • Seek Legal Counsel: Consulting with an experienced securities attorney can help you understand your rights, assess your potential claims, and navigate the legal process.

How to Take Action

If you believe you’ve been affected by Soleno Therapeutics’ alleged misleading statements, here are some steps you can take:

  1. Document Your Losses: Gather documentation of your Soleno Therapeutics stock purchases, including purchase dates, number of shares, and the amount of your losses.
  2. Contact a Securities Attorney: Reach out to a law firm specializing in securities litigation to discuss your situation and explore your legal options.
  3. Stay Informed: Keep up-to-date on the latest developments in the investigations and any potential class action lawsuits.

Finding Legal Representation

Several law firms have announced investigations into Soleno Therapeutics and are seeking to represent affected investors. When choosing legal counsel, consider the following:

  • Experience: Look for a firm with a proven track record in securities litigation and class action lawsuits.
  • Resources: Ensure the firm has the resources and expertise to thoroughly investigate your claims and pursue legal action.
  • Communication: Choose a firm that communicates clearly and keeps you informed throughout the legal process.

The Importance of Acting Now

Securities investigations and lawsuits often have deadlines, so it’s crucial to act promptly to protect your rights. By taking swift action, you can:

  • Preserve Your Claims: Ensure you don’t miss any deadlines for participating in a class action lawsuit or pursuing individual claims.
  • Maximize Your Recovery: Increase your chances of recovering your financial losses.
  • Hold the Company Accountable: Help hold Soleno Therapeutics accountable for its alleged misconduct.

Conclusion

The investigations into Soleno Therapeutics highlight the importance of transparency and accurate disclosures in the world of publicly traded companies. If you’re a Soleno investor who has suffered losses, understanding your rights and taking action is essential. By seeking legal counsel and staying informed, you can navigate this challenging situation and work towards recovering your investments.