In early 2014, Galena Biopharma (NASDAQ: GALE ) stock was on fire, with the company riding high on strong results from its phase 2 study of cancer immunotherapy product NeuVax, which is designed to prevent cancer recurrence in select breast cancer patients.
Unfortunately, allegations surfaced shortly thereafter that the company had hired a third-party promoter to "promote" Galena's stock. While this isn't illegal, it is illegal if the arrangement isn't properly disclosed. A few months later, the now-former CEO of Galena, Mark Ahn, stepped down. While no clear connection was ever made between the stock-promoting company and Galena's management, this event was enough to damage investors' faith in management and send shares plummeting.
