🚨 LUNAI EXPANDS NAKED SHORT SELLING SUIT – SIX BROKER-DEALERS NAMED
Second Amended Complaint alleges millions of short sales amid significant discrepancies between short-sale activity and documented locate availability.
August 27, 2026
Lunai Bioworks has significantly expanded its federal securities litigation, naming six registered broker-dealers and two broker-dealer principals as defendants in a Second Amended Complaint filed August 26 in the U.S. District Court for the District of Delaware.
The newly named broker-dealers are Lightspeed Financial Services Group LLC, Cobra Trading, Inc., Opal Securities, Inc., Seven Points Capital, LLC, SageTrader, LLC, and Hold Brothers Capital, LLC.
The 182-page complaint moves the litigation considerably deeper into the mechanics of the alleged trading activity.
Lunai alleges that records obtained during its continuing analysis identify 579 accounts responsible for approximately 35.9 million LNAI shares sold short during the relevant period. The company has currently named holders associated with 199 of those accounts and states that additional defendants may be identified as its analysis continues.
More significantly, the complaint contains detailed allegations concerning the relationship between short-sale activity and the availability of share locates.
Among them, Lunai alleges that Lightspeed submitted locate requests covering approximately 28.5 million LNAI shares but received allocations covering only 191,273 shares.
The complaint alleges that Cobra customers sold approximately 4.8 million shares short on 31 trading days when every Cobra locate request was refused.
And Lunai alleges that Opal customer accounts sold approximately 20.5 million LNAI shares short, while no locate request for LNAI by Opal appears in the records obtained by Lunai.
These allegations have not been adjudicated, and the defendants will have an opportunity to challenge Lunai’s factual and legal claims.
But the specificity of the Second Amended Complaint represents an important development. The case is moving beyond statistical indicators such as extraordinary trading volume and failures to deliver and into the underlying infrastructure of short selling – customer accounts, introducing brokers, locate requests, clearing relationships and securities-lending records.
Lunai also alleges manipulative practices including wash trading, spoofing, layering, marking the close and transactions designed to reset failures to deliver. Those broader allegations will require further examination as the litigation proceeds.
NakedShortStop is reviewing the Second Amended Complaint and its supporting allegations in detail. A more comprehensive report examining the trading records, locate data, clearing relationships and alleged market-manipulation mechanisms will follow.
Primary Source
Lunai Bioworks, Inc. v. Does 1-50, et al.
Second Amended Complaint
U.S. District Court for the District of Delaware
Civil Action No. 26-549-CFC
Document 37 – Filed August 26, 2026