Boston, MA 04/16/2014 (wallstreetpr) – Galena Biopharma Inc (NASDAQ:GALE) is subject of the U.S. Securities Exchange Commission investigations. The biotech is facing claims of authorizing unlawful marketing campaigns that created a buzz in the stock and inflated shares, allowing insiders to make millions of dollars through the sale of thousands of shares.
However, it is easy to see that management oversight might part of the problem here, especially considering that the company denies any wrongdoing. When a question was put to Galena CEO Mark Ahn about whether his company authorized the marketing campaign that has now caused a stir, he said that he did not review the articles written by their outside-investor relations firm before they were published. Although the CEO claimed that he did not believe that DreamTeam, the investor relations firm Galena retained in 2013, directly authored the controversial articles.
However, the admittance by Mr. Ahn that Galena Biopharma Inc (NASDAQ:GALE) did not review the articles before they were published shows an oversight that could cost the company dearly. In any case, the stock is already tumbling since the company announced that it was being investigated by SEC.
Owing to the alleged trade malpractice, Galena faces about five lawsuits, which include four before the federal court where the company is accused of the violation of shareholder protection laws.
Shares of Galena Biopharma Inc (NASDAQ:GALE) almost tripled since last July during which the alleged marketing campaigns were performed to artificially inflate the price of the shares.
Financial performance
Although the claim of artificial share-price inflation and the subsequent investigations have put pressure on the stock of Galena, the Galena’s loss reporting in the fourth quarter of 2013 did not make things any better. The company reported a loss of $48.5 million or $0.46 per share in the quarter.
Considerable advances
According to CEO Ahn, Galena Biopharma Inc (NASDAQ:GALE) envisions big progress in 2014, given the significant advances the company made in the past year. However, those big advances have been overshadowed by the ongoing SEC investigations.
