The legal action, filed in the U.S. District Court for the Southern District of New York, targets investors who purchased iTonic securities between September 5, 2024, and July 29, 2025. Plaintiffs contend that Pengfei Zhang—the brother of CEO Jianfei Zhang—held the authority to control public disclosures but failed to prevent the dissemination of misleading information. The complaint argues that the board neglected to address significant risks, providing only generic warnings while the company’s stock became the target of a coordinated promotional scheme.

The crisis culminated on July 29, 2025, when iTonic shares plummeted from an intraday high of $32.00 to approximately $1.65. This crash occurred after the company confirmed it had no contact with Gilead Sciences, effectively debunking rumors that had previously fueled the stock's rise. Under Section 20(a) of the Securities Exchange Act, the lawsuit seeks to hold individual directors accountable for their oversight of SEC filings and corporate communications. Investors seeking to participate as lead plaintiffs in the case have until September 29, 2026, to file with the court.