Galena Biopharma fka GALE

[Euripides90]

I was so thrilled they finally got rid of Ahn, it wasn't scapegoating he was the problem. With this report and the seemingly strong progress on Neuvax trials reported last week (based on a small group of patients only though so far), this should move up up back to $3.40 and beyond where it was when Frogeyes from the Street started hacking away at it again, making it a steal for the shorts.

http://www.nasdaq.com/press-release/galena-biopharma-announces-release-of-special-committee-report-and-hosting-of-a-conference-call-to-20140925-00899

I'm also looking for details of their enhanced public awareness campaign.

This is the Executive Summary from the Special Committee's Report (footnotes omitted):

On February 12, 2014, Adam Feuerstein, staff writer for the website TheStreet, published an article reporting that the website Seeking Alpha had removed two articles touting Galena Biopharma, Inc. (the "Company" or "Galena") from its website because the articles were written by the same person using different aliases. Mr. Feuerstein made a similar report a year earlier, writing that Seeking Alpha removed five articles touting the Company from its website because the articles were written by a single individual using three pseudonyms. Mr. Feuerstein, however, claimed that this time there was evidence linking the articles to an investor relations firm the Company had retained known as the Dream Team Group ("DTG").

Mr. Feuerstein reported that DTG had disclosed that the Company had paid it $50,000 in July of 2013 for 240 days of "advertising, branding, marketing, investors relations, and social media services" on its website. Based on a document obtained by TheStreet titled "Galena Biopharma Case Study: Investor Awareness Campaign," he concluded that DTG wrote several favorable articles about the Galena under the guise of individual investors. Mr. Feuerstein emphasized that none of the articles disclosed a financial relationship between DTG and the Company. Mr. Feuerstein conceded, however, that Seeking Alpha never determined if DTG paid the bloggers allegedly using multiple aliases. He ultimately concluded that the articles allegedly written at the direction of DTG must have been the cause for the dramatic increase in value of the Galena's stock over the previous eight months.

Shortly thereafter, Richard Pearson, a frequent blogger, published an article on Seeking Alpha claiming that he had been approached by DTG to write paid promotional articles about two of its clients, including the Company. According to Mr. Pearson's account, Tom Meyer, his contact at DTG, offered to pay him $300 per article written about the Company. Mr. Pearson wrote that he soon discovered that Mr. Meyer, who claimed to write paid promotional articles about the Company himself, used a slew of aliases when writing about the Company. These aliases included Christine Andrews, John Rivers, James Ratz, James Johnson, Ted Meyer, Wonderful Wizard, Equity Options Guru, Kingmaker , and Expected Growth. Mr. Pearson further wrote that, through Mr. Meyer, he met John Mylant, another of DTG's alleged paid promotional bloggers.

As his article read, in order to investigate the extent of management's involvement in the "paid promotion scheme," Mr. Pearson began submitting "dummy articles" regarding Galena and another company to DTG. His payments, he claimed, were conditioned on two prerequisites: the Company "signing off" and "editing" the articles and his ability to keep the payments a secret. According to Mr. Pearson, he played along in his self-described undercover role and submitted at least two separate articles to DTG. One company, Mr. Pearson wrote, heavily edited his article while, in contrast, the article he submitted about Galena to DTG was allegedly cancelled by Galena before publication. Mr. Pearson attributed the cancellation to the publication of the Feuerstein article and the subsequent public scrutiny that followed. In the end, Mr. Pearson concluded that the articles allegedly written at the direction of DTG, such as those written by Mr. Meyer and Mr. Mylant, had an "enormous effect" on the companies' stock prices. Since the publication of Mr. Pearson's article, he has come under criticism for shorting the other company's stock before publishing his scathing article and for denying that he previously published articles touting Galena. It has since been discovered that he touted the Company in a January 27, 2014 article.

The publication of the Feuerstein and Pearson articles, along with the public disclosure that officers and directors of the Company had sold a large number of shares of the Company's stock just before the publications, led to a cascade of derivative and class actions tying the events to an alleged "pump and dump" scheme by insiders. In response to the articles and complaints, the Board of Directors of the Company (the "Board") formed a Special Committee charged with determining the merits of the articles and complaints. The Special Committee thereafter retained Locke Lord LLP as counsel and began an investigation.

This report memorializes the findings of the Special Committee's investigation, which included the interviews of numerous employees, officers, and directors and the review of over 140,000 pages of documents. Although the Special Committee lacked subpoena power, we believe that we obtained sufficient information to make the following findings of fact:

(1) We found no evidence that the Company was aware that DTG paid bloggers to write favorable articles about the Company or its products;

(2) We found no evidence that the Company was aware that certain bloggers used multiple aliases when writing about the Company;

(3) We found no evidence that the Company hired DTG with the specific intent to increase the price of the Company's stock, although DTG apparently used the Company's stock price as a measure of its effectiveness;

(4) We found no evidence that articles allegedly written at the direction of DTG contained false or misleading statements of material fact;

(5) We found no substantial evidence that the articles allegedly written at the direction of DTG had a material effect on the price of the Company's stock;

(6) We found no evidence that, with the exception of Mark Ahn, insiders had knowledge of DTG 's activities before trading in the Company 's stock;

(7) We found no evidence that officers and directors had material nonpublic information before trading in the Company's stock; and

(8) We found no evidence that the trades by officers and directors in the first quarter of 2014 violated Company policy.

Based on these findings of fact, we conclude that there is no credible basis for finding that the Company or insiders violated applicable law as alleged in the class and derivative actions or that insiders breached their fiduciary duties to the Company under any jurisdictional standard. Moreover, we do not recommend that the Company pursue claims against any person or entity as a result of the findings of this investigation.

Read more: http://www.nasdaq.com/press-release/galena-biopharma-announces-release-of-special-committee-report-and-hosting-of-a-conference-call-to-20140925-00899#ixzz3ENH1OLhm