WASHINGTON, DC (Michigan News Source) – A new filing in the U.S. Court of Federal Claims shows the federal government isn’t backing off its fight against Reven Holdings, Inc. – and continues to urge the court to throw out the company’s constitutional “takings” lawsuit altogether primarily on jurisdictional grounds.
The case.
Reven Holdings, Inc., a clinical stage biotech and pharmaceutical company that raised millions from investors for the development of the “breakthrough drug” Rejuveinix (RJX), was previously on track for a first-in-class designation. That means it would treat disease through a new and previously unapproved mechanism of action.
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But those plans came to a halt when federal regulators stepped in. The company is now at the center of a federal securities fraud case which was brought by the U.S. Securities and Exchange Commission (SEC) in December of 2022 through filing an ex parte request – and receiving an ex parte order for a temporary restraining order and asset freeze from the United States District Court for the District of Colorado.
The SEC alleges the company and its principals misled investors and misappropriated millions, prompting a federal judge in Colorado to impose a sweeping asset freeze that effectively shut down the company’s operations in January of 2023. Reven denies wrongdoing and early in the case provided third party forensic accounting evidence to dispel the misappropriation allegations. Reven has appealed the injunction – while simultaneously filing a separate lawsuit in August of 2024 claiming the asset freeze itself amounts to an unconstitutional permanent “taking” of its property without compensation.
DOJ says wrong court, wrong claim.
After seeking multiple extensions, the Department of Justice (DOJ) filed a February 26, 2026 response to a judge’s order and questions posed to both parties, arguing that Reven is improperly attempting to re-litigate a Colorado federal court’s asset freeze by repackaging it as a Fifth Amendment takings claim. The government maintains that only a federal district court – not the SEC – has authority to impose or modify an asset freeze, meaning any alleged “taking” stems from a judicial order, not agency action. As a result, the DOJ contends the Reven lawsuit amounts to an improper “judicial takings” claim, and under long-standing Federal Circuit precedent, the U.S. Court of Federal Claims cannot review or second-guess another federal court’s ruling.
Reven disputes that claim and argues that the SEC’s repeated opposition to motions seeking modifications to the asset freeze prevented the company from preserving its assets, ultimately resulting in the total loss of the company’s holdings. The Reven principals feel that the SEC’s position is especially ironic since the asset freeze was sought by the SEC to “preserve the status quo” and “protect the shareholders from the illicit dissipation of assets.” In response, Reven properly filed an appeal with the U.S. Court of Appeals for the Tenth Circuit seeking relief from the injunction and asset freeze and has not sought to overturn a lower court decision through the Court of Federal Claims.
Even if the court has jurisdiction, DOJ says the takings claim still fails.
The DOJ also argues that even if jurisdiction existed with the U.S. Court of Federal Claims, Reven still wouldn’t have a valid “takings” claim. Why? They cite many things including that when a company chooses to sell securities and solicit investors, it voluntarily steps into a heavily regulated arena. Asset freezes in fraud cases, the government says, are longstanding tools designed to protect investors and preserve funds for potential repayment to investors. The filing further contends that SEC enforcement actions fall squarely within the government’s “police power” – meaning actions taken to protect the public don’t require compensation under the Takings Clause. In this case, however, the Reven leadership and their attorneys argue that the SEC’s actions did not protect the public, rather they only caused destructive harm and loss to investors and the general public at large.
Confusion in the court.
The arguments being made now are the same points that the DOJ previously made in February of 2025 during a court hearing where Judge Marian Blank Horn repeatedly signaled frustration with how difficult it was to untangle the legal issues in the case, particularly the overlap between the SEC enforcement action in another court and the takings claim being brought in the Court of Federal Claims. She noted that the case involved “some tough legal issues” and acknowledged that she had not yet determined the correct answer on jurisdiction.
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Much of the judge’s concern centered on whether the court could examine the consequences of the asset freeze without effectively reviewing or second- guessing the district court’s decision that imposed it. She pressed the plaintiffs’ attorneys on whether the government’s action should be considered legitimate, how the district court proceedings affected the takings analysis, and whether the alleged taking was permanent or temporary. At several points, the judge openly admitted that the situation was complicated and unusual, indicating she was still trying to determine the proper legal framework before deciding how the case should proceed.
Even more concerning during this hearing was the government’s assertion that the SEC doesn’t necessarily have to prove actual illegality to pursue a company – only what it views as perceived illegality.
Reven’s answer.
Reven filed their own briefs to the court’s questions in October of 2025. In its supplemental brief, Reven’s attorneys argue that while the SEC’s asset freeze was authorized as part of a lawful enforcement action, the way it was executed amounted to an unconstitutional taking of the company’s property without just compensation. Reven concedes, for purposes of its takings claim, that the SEC had statutory authority to seek an asset freeze and that the district court acted within its authority in imposing it. However, the company contends that the freeze “directly, intentionally, and foreseeably” deprived it of all beneficial use of its tangible and intangible property – including patents, patent applications, clinical data, goodwill, and corporate funds – effectively putting it out of business. In Reven’s view, even a valid and authorized government action can trigger the Fifth Amendment’s just- compensation requirement if it destroys private property rights.
Power to act doesn’t mean power to take.
Reven also rejects the government’s suggestion that the SEC’s actions fall within a “police power” exception to the Takings Clause. It argues in the filing “Any lawful exercise of police power that destroys or confiscates private property rights can be an unconstitutional taking. There is no police power exception to the Fifth Amendment’s just compensation requirement.”
The company maintains that the freeze caused permanent harm and that whether the injunction is ultimately upheld or reversed on appeal will not resolve the constitutional question of compensation. In short, Reven’s central position is that the SEC may have had the power to act, but when that action wiped out the company’s property interests, the Constitution required the government to pay for what it effectively took.
The bottom line.
The government wants the case dismissed – either for lack of jurisdiction or for failure to state a valid claim. If the Court agrees, Reven’s constitutional gambit could be over before it ever gets off the ground – leaving the asset freeze in place while the securities fraud case plays out.
