Biotech Values

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Biotech Company Retrophin Fired CEO Because of Stock Irregularities
http://www.businessweek.com/articles/2014-10-02/biotech-company-retrophin-fired-ceo-because-of-stock-irregularities

Yesterday I wrote about the abrupt ouster of biotech company chief Martin Shkreli, a former short seller who took the ultimate long position—starting Retrophin, a publicly traded drug manufacturer. At Bloomberg Businessweek, we’d taken a special interest in the precocious Shkreli, 31. We’ve wondered whether, after years of betting on biotech stocks to fall, he’d undergone a conversion or was using his knowledge to game the field.

Now I’ve got some specifics on why Retrophin’s board of directors unceremoniously dumped the executive on Tuesday. According to people familiar with the company, the board concluded that Shkreli had committed stock-trading irregularities and other violations of securities rules. The violations included grants of Retrophin stock to certain recipients in the absence of a shareholder-approved distribution plan, failures to disclose stock grants, and grants of stock above limits imposed by the plan that was eventually put in place, according to the people familiar with the company. Shkreli has not returned messages I’ve left on his cell phone seeking more substantive comment.

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It is now Retrophin that will find itself the target of civil litigation. A shareholder suit was filed today against the company in federal court in New York, making reference to Shkreli’s ouster, the interim CEO, Aselage, confirmed.