Based on the SEC case, the SEC alleges in paragrap
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Posted On: 09/21/2023 1:43:08 PM
Based on the SEC case, the SEC alleges in paragraphs 3-5:
In April 2020, Pourhassan caused CytoDyn to falsely announce that it had
submitted a “completed” Biologics License Application (“BLA”) to the U.S. Food and Drug Administration (“FDA”), which would have been a key milestone for the company. In reality, as Pourhassan knew, CytoDyn’s BLA submission was woefully incomplete—it was missing key clinical data that the FDA had been telling the company it must include in its BLA submission for nearly two years.
Within two days, the FDA alerted CytoDyn to the falsity of this press release,
which Pourhassan edited, reviewed, and approved. But, instead of alerting the public, Pourhassan executed on his own plan (in violation of corporate policies) to exercise stock options and liquidate stock while the company’s stock price was artificially inflated. All told, in the days following the false press release, Pourhassan sold approximately $15.8 million worth of CytoDyn stock, netting profits of more than $4.7 million.
Defendant Kazempour, the CEO of a contract research organization CytoDyn
hired to interface with the FDA and assist with its BLA submission, participated in the scheme by signing off on the incomplete BLA at Pourhassan’s direction to help Pourhassan boost the stock price. Though Kazempour knew the FDA would ultimately reject the submission (which it did), he managed to exercise his own CytoDyn stock options and sell more than $420,000 worth of CytoDyn stock, for profits of more than $340,000, before the public knew what he knew.
I can't imagine they would put those allegations in there if they didn't have pretty solid evidence to prove it. That second paragraph is pretty damning for Nader because he opted not to alert the public. The third one is pretty daming for Kazempour. I don't see how these guys get out of that. The question is just will it be a slap on the wrist or will the punishment fit the crime?
In April 2020, Pourhassan caused CytoDyn to falsely announce that it had
submitted a “completed” Biologics License Application (“BLA”) to the U.S. Food and Drug Administration (“FDA”), which would have been a key milestone for the company. In reality, as Pourhassan knew, CytoDyn’s BLA submission was woefully incomplete—it was missing key clinical data that the FDA had been telling the company it must include in its BLA submission for nearly two years.
Within two days, the FDA alerted CytoDyn to the falsity of this press release,
which Pourhassan edited, reviewed, and approved. But, instead of alerting the public, Pourhassan executed on his own plan (in violation of corporate policies) to exercise stock options and liquidate stock while the company’s stock price was artificially inflated. All told, in the days following the false press release, Pourhassan sold approximately $15.8 million worth of CytoDyn stock, netting profits of more than $4.7 million.
Defendant Kazempour, the CEO of a contract research organization CytoDyn
hired to interface with the FDA and assist with its BLA submission, participated in the scheme by signing off on the incomplete BLA at Pourhassan’s direction to help Pourhassan boost the stock price. Though Kazempour knew the FDA would ultimately reject the submission (which it did), he managed to exercise his own CytoDyn stock options and sell more than $420,000 worth of CytoDyn stock, for profits of more than $340,000, before the public knew what he knew.
I can't imagine they would put those allegations in there if they didn't have pretty solid evidence to prove it. That second paragraph is pretty damning for Nader because he opted not to alert the public. The third one is pretty daming for Kazempour. I don't see how these guys get out of that. The question is just will it be a slap on the wrist or will the punishment fit the crime?
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