Scilex Holding Company is accusing BNY Mellon of enabling a $100 million stock loan fraud that allegedly looted its pledged securities.
In a federal lawsuit filed in the Central District of California, Scilex claims it handed over more than 85 million shares of Datavault AI as collateral for a loan of up to $100 million — and that those shares were sold out from under it without authorization (Scilex Holding Company v. Wade et al., Case No. 8:26-cv-00550, C.D. Cal.).
The alleged scheme worked like this: Marc Wade, operating through Bahamas-based entities St. James Bank & Trust and Omega & Corinth Group, struck a non-recourse stock loan deal with Scilex in late 2025. Wade reportedly told Scilex executives he was an experienced financial professional who had completed "$6-7 billion" in stock loan transactions for insurance companies. The agreement required St. James to hold the pledged shares until the loan was repaid or Scilex defaulted. Scilex says it never defaulted.
But according to the lawsuit, Wade and his associates never intended to hold anything. Scilex alleges the defendants lacked the capital to fund the loan and instead planned from the start to sell the collateral, use proceeds to cover the loan at a 60% loan-to-value ratio, and walk away with roughly 40% of the sale proceeds.
When Scilex asked about the status of its shares, St. James's chief operating officer allegedly assured them the securities had not been sold. Scilex says that was false — by that point, nearly all of the pledged shares had already been liquidated.
The lawsuit zeroes in on BNY Mellon's involvement. Scilex claims its transfer agent confirmed that the overwhelming majority of DVLT shares held and traded by BNY Mellon sat in an account designated for Scilex's benefit. The problem: Scilex says it never opened an account at BNY Mellon and never authorized any transfers to the bank. The lawsuit alleges BNY Mellon processed the transactions without conducting meaningful Know Your Customer or anti-money-laundering checks — and without filing required SEC reports, including Forms 13G, 4, and 13-H.
For wealth management professionals, this case raises uncomfortable questions about how a major custodian bank could allegedly become the vehicle for a fraud of this scale. The allegations point to gaps in account verification, compliance monitoring, and counterparty due diligence — areas that directly affect how advisors and firms evaluate the institutions holding their clients' assets.
Scilex also alleges the defendants manufactured loan defaults by dumping shares at high volume to drive down DVLT's price, then demanding additional collateral and fees to cure the alleged defaults.
The lawsuit cites a pattern: Wade has faced similar allegations before, including a confirmed arbitration award exceeding $16 million, and St. James and Omega & Corinth face at least four additional claims in the United Kingdom for allegedly identical conduct.
Scilex is seeking more than $100 million in damages, punitive damages, rescission of the loan agreement, and disgorgement. No determination on the merits has been made.
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