Boston, MA 03/07/2014 (wallstreetpr) – Galena Biopharma Inc (NASDAQ:GALE) in a normal day should be concerned about its various drug studies in order to bring new products to the market and boost its revenue and bottom line. In other words, the company has the responsibility of maximizing value for shareholders. Yet, while the company is trying to do just that, it is doing it with divided attention – one in pharmaceutical studies and another in dealing with investor lawsuits against it.
The company is currently facing two well-known lawsuits presented against it by investors. And they all have to do with how the company has been dealing in its stock.
As the talks about misleading claims escalate, the stock of Galena Biopharma Inc (NASDAQ:GALE) is getting more on the losing end. The stock was last traded at $3.46, having lost 10.82 percent in the regular session. The loss in the stock has been around for quite a while and it is both a result and a root for the lawsuits.
Misleading stock actions
Galena Biopharma Inc (NASDAQ:GALE) has had a fresh lawsuit brought against it by a Portland attorney with Robbins Geller Rudman & Down LLP of San Diego, representing Michael Deering. The lawsuit charges the management of GALE for violation of certain securities provisions.
The company’s board and officers are accused of running a campaign to misleadingly promote the shares, with the aim of artificially inflating the price of the stock. The lawsuit claims that such actions were responsible for the hike of the stock price to $7.48 in mid-January.
It was during that time when insiders unloaded their shares to take advantage of the inflation. It is cited that Galena Biopharma Inc (NASDAQ:GALE) chief executive Mark Ahn sold his holding in GALE worth $3.4 million at that time.
A similar claim was made against the company in Multnomah Circuit Court, just about a week ago.
Stock price inflation
Galena Biopharma Inc (NASDAQ:GALE) is accused of paying money to an investor relations company to publish articles promoting the stock. The awareness campaign helped to uplift the stock and created a profitable base for insiders to sell. But it has now resulted in not only the stock going south, but a headache for the management.
