GALENA BIOPHARMA CASE STUDY INVESTOR AWARENESS CAMPAIGN
Plaintiffs also allege that DreamTeam’s marketing materials brag about how DreamTeam writers post articles on Seeking Alpha , resulting in more than 6, views for a single article. Although these stock options were granted in November , they vested over a period of three years, in twelve equal quarterly installments. Pickett , F. A more detailed discussion of Plaintiffs’ specific allegations is included in the following section. As alleged by Plaintiffs, Seeking Alpha is the leading website used by analysts and professional and institutional investors to publish independent analyses related to investment. The analysis in Janus rested on the fact that one business entity had a statutory obligation to file, and did file, allegedly misleading documents with the SEC, while another legally distinct business entity merely contributed content that the first company could choose whether to include in the SEC filing.
Iqbal , U. Hochfelder , U. Plaintiffs allege that Galliker sold , shares, representing Plaintiffs do not allege, however, who, if anyone, signed Galena’s September Prospectus. The analysis in Janus rested on the fact that one business entity had a statutory obligation to file, and did file, allegedly misleading documents with the SEC, while another legally distinct business entity merely contributed content that the first company could choose whether to include in the SEC filing. The minutes from the January 16, Board meeting reflect that after discussion, the Board lifted the trading blackout.
Scheme created fake news stories to manipulate stock prices, SEC alleges
Although the authors may be the ones who pressed “send” on a submission to Seeking Alpha and the other online forums that published the articles, as alleged Ahn and Bernarda are the persons who decided what content to include in the final article and whether any particular article would be published. There is a substantial likelihood that a reasonable investor would have found the fact that Galena’s Prospectus and SEC filings did not disclose that the Company and its officers were engaging in fraud or market manipulation to have significantly altered the “total mix” of information.
The Company has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Common Stock or any security of the Company to facilitate the sale or resale of any of the Securities.
Plaintiffs allege email correspondence in which Meyer, purporting to speak on behalf of DreamTeam, discussed how one article about Galena did not address a biopharam attack on the Company because the article had been submitted for approval before galeena attack but not approved for publication by Galena until after.
Plaintiffs do, however, make some allegations specific to McCarthy. The next day, January 23,he sold another , representing approximately 88 percent of his then-remaining shares.
Similar to the allegations made against Ahn, Plaintiffs allege that Bernarda corresponded extensively with DreamTeam and Lidingo; reviewed, edited, and approved the articles; knew that the articles were part of the paid promotional scheme; admitted to the Special Committee that she knew the articles were part of the paid promotional campaign; received copies of campaigh published articles; and knew the articles did not disclose their paid connection to Galena.
The signatories to those documents, and through them, Galena, are “makers” of statements contained in those documents. Nichols, who did not respond to emails or phone messages seeking comment, runs BNL Finance, a news site. Most of the articles were written under false aliases, including obvious aliases like “Kingmaker” and “Wonderful Wizard.
Scheme created fake news stories to manipulate stock prices, SEC alleges – Los Angeles Times
Such disclosures are required under Section 17 b of the Securities Act of If the alleged plan was successful, the stock price would increase. Xwareness separately argues that the campaign did not need to be disclosed because it was alleged to increase the price of stock and an increase is not “fluctuation,” which means both increase and decrease.
As a result, whenever the investor buys or sells stock at the market price, his “reliance on any public material misrepresentations. This insider trading “blackout” was in place because Galena insiders had received Galena’s preliminary earnings report and thus could not trade until the final earnings report was publicly disclosed. The Supreme Court recently clarified that only the “maker” of a statement can be held liable for alleged misrepresentations and omissions under Rule 10b-5 b.
Hillsberg’s dramatically out-of-line stock sales weigh heavily toward stidy inference of scienter. Island Mortgage NetworkInc. Ikon Office SolutionF. After Galena chose to disclose a lengthy list of awarrness why its stock price might fluctuate, it needed to include in that list the alleged scheme that Galena was manipulating the stock price with the help of DreamTeam and Lidingo.
Plaintiffs’ allegations show that Ahn and Bernarda, and not DreamTeam or the article’s author, had the final, or ultimate, authority to publish the articles and had the final say about the article’s content. The company’s technology should be ready to launch soon, he said.
He is a co-founder of Kindred Biosciences, Inc. He is one of the first Galena insiders to sell any shares. To the contrary, Plaintiffs allege that Bernarda stated that she was told by Ahn that he had not renewed Lidingo’s contract.
The Ninth Circuit has rejected awarrness similar argument that statements or omissions in a private contract cannot be actionable in a securities fraud action.
The Court notes that scienter is a required element of any securities fraud sudy whether under Rule 10b-5 abor c.
Further, the allegations that Bjorlin counseled Ahn that having Lidingo operate the promotional campaign offered “protection” and was “safer,” coupled with the fact that Bjorlin sought stock options to compensate for the “risk” that Lidingo was taking supports a strong inference canpaign Bjorlin knew the campaign conducted by Lidingo was improper. Kriegsman or his personal assistant at CytRx made changes to articles drafted by undercover analyst Mr.
Council PensionF. Thus, Plaintiffs have not adequately alleged any individual defendant to be the maker of the allegedly false or campqign statements contained in the Prospectus.
In re Galena Biopharma, Inc. | D. Or. | Judgment | Law | CaseMine
Such an interpretation comports with the Supreme Court’s directive to construe the Exchange Act “‘not technically and restrictively, but flexibly to effectuate its remedial purposes. Plaintiffs do not identify a single article published as a result of Galena’s relationship with Lidingo that did not contain the required disclosure that the article was part of a paid promotional campaign.
The Court further finds that articles touting Galena published by stjdy experienced investors on highly-regarded investment websites are documents on which an investor presumably would rely.
Second, as discussed below, the Court finds that Plaintiffs adequately allege a “scheme” or “manipulation” claim artificially to inflate Galena’s stock price.