So worrisome is the trend, the SEC recently filed complaints against more than a dozen companies and people, including Bjorlin, alleging that they pretended to provide independent analysis on financial websites such as Seeking Alpha, Forbes, the Motley Fool and Benzinga that were actually paid for by companies. Kriegsman, as chair of the Compensation Committee, was involved in that decision. If the Court were to consider the individual authors as the makers of those statements, then companies could avoid liability under the Exchange Act simply by paying third parties to write and publish false or misleading statements about the company, even when the company retains final decision-making authority over content. Simon , District Judge. Ritchie , F.
This putative class action securities fraud case is brought by shareholders “Plaintiffs” of Defendant Galena Biopharma, Inc. Although these stock options were granted in November , they vested over a period of three years, in twelve equal quarterly installments. Plaintiffs also allege that Galena’s Compensation Committee awarded stock options in November , at a time of year when the Company had never before awarded stock options, to take advantage of the promotional scheme. Plaintiffs make two specific allegations to this effect. Plaintiffs allege that within hours of this article’s publication, Galena fired DreamTeam. Finally, Ahn’s insider stock sales support a strong inference of scienter.
In re Galena Biopharma, Inc. | D. Or. | Judgment | Law | CaseMine
The day after Mr. Further, the fact that Ahn was terminated for cause, or even if he resigned as stated by Ahnafter the conduct came to light is evidence supporting an inference of scienter.
Plaintiffs allege both direct misrepresentations and omissions by Galena and awarehess officers and misrepresentations and omissions through publications placed by DreamTeam or Lidingo.
Ultimately, a securities fraud plaintiff must prove that the defendant’s misrepresentation was a “substantial cause” of his or her financial loss.
cajpaign Thus, because the Court has found that Plaintiffs do not adequately allege Dunlap’s scienter, Plaintiffs’ claim of securities fraud against Dunlap has not been sufficiently alleged. Feuerstein’s report, neither Galena nor anyone else had announced that Ahn had left the company.
Bernarda recommended that Galena hire Tiberend, a traditional, full service cqmpaign relations firm specializing in the healthcare and life sciences industry. LaurientiF. Additionally, Plaintiffs’ allegation that Galliker was familiar with DreamTeam and how it operated because he had hired DreamTeam to promote the stock of Kindred further supports an inference of scienter. Pearson also released his emails with Meyer, who claimed to be an employee of DreamTeam working closely with McCarthy.
No doubt Congress meant to prohibit the full range of ingenious devices that might be used to manipulate securities prices. Plaintiffs allege that in AprilBjorlin sent gqlena email to a Galena manager asking about payment and noting that “the writers are due to be paid on the fifth.
Kriegsman’s stock sales as alleged by Plaintiffs thus weigh heavily in favor of a scienter inference. The analysis stuey Janus rested on the fact that one business entity had a statutory obligation to file, and did file, allegedly misleading documents with studh SEC, while another legally distinct business entity merely contributed content that the first company could choose whether to include in the SEC filing.
Plaintiffs also argue, however, that both Galena and DreamTeam had ultimate authority over the published articles.
Scheme created fake news stories to manipulate stock prices, SEC alleges
Tuttle and Scott N. If an article is a paid promotion, it must affirmatively state as much. In addition to the alleged scheme and the alleged misrepresentations made through the promotional campaign, Plaintiffs allege that Galena made false or misleading statements in its own name. The Supreme Court also noted that “[o]ne who prepares or publishes a statement on cxse of another is not its maker. Plaintiffs do not, however, sufficiently plead Bjorlin’s scienter with respect to Galena’s cammpaign with DreamTeam.
Plaintiffs’ allegations also support an inference that McCarthy was part of a scheme artificially to inflate Galena’s stock price. The Court also notes that Plaintiffs do not plead facts sufficient to show who are the “makers” of Lidingo’s emails, blog posts, or articles. He is one of the first Galena insiders to sell any shares.
Defendants argue that Plaintiffs do not properly to plead loss causation because, as pled by Plaintiffs, the information disclosed in the alleged corrective disclosures was “already publicly available on the internet” and thus was not new information to the market.
For some conduct, Plaintiffs may not know who at DreamTeam was involved.
Similarly, on November 27,Galena and DreamTeam caused another article to be published on the website Seeking Alpha using the alias “Stock Whisper” and then posted on DreamTeam’s blog, stating that “Stock Whisper” had published a bullish article about Galena.
Feuerstein alleged that Galena was engaging in a misleading brand-awareness campaign aimed at boosting its stock price.
Scheme created fake news stories to manipulate stock prices, SEC alleges – Los Angeles Times
The DreamTeam Defendants’ reading of the “in connection with” requirement is too narrow. BankU.
No analogous situation is involved here. The lesson of Janus is that where legally distinct entities are involved, only one entity has the final say in what, if anything, is published. Plaintiffs also incorporate by reference emails to DreamTeam in which Ahn requests that he be sent copies of published articles.
In one email dated April 12,Bjorlin notes that she has sent Ahn the articles that Lidingo had written. Moreover, throughout the Consolidated Complaint, Plaintiffs allege that Defendants engaged in a fraudulent “scheme,” including a “scheme to manipulate Galena’s stock price.
At least four other companies already offer generic fentanyl in the United States. As discussed above, the Court finds that the Consolidated Complaint awardness adequate notice that Plaintiffs are asserting scheme claims under Rule 10b-5 a and c.