Biotech Values

[ghmm]

SEC cites Jason Napodano for small-scale pump-and-dump operation:

Its actually a bit worse than that!

https://www.sec.gov/litigation/complaints/2017/comp-pr2017-177.pdf

On three separate occasions in 2014, Defendants traded securities while in
possession of material nonpublic information they learned through their work for issuer clients of
LBMZ and/or SCR. In January 2014, Defendants traded in advance of an announcement by a
biotechnology company (“Company A”) regarding a licensing agreement, which Defendants
learned about through LBMZ’s and SCR’s business relationships with Company A. In
November 2014, Defendants traded in advance of an announcement by a medical technology
company (“Company B”) regarding the termination of a merger agreement, which Defendants
learned about through LBMZ’s business relationship with Company B. And in August of 2014,
Defendants traded in advance of an announcement by a pharmaceutical company (“Company
C”) that it had been approved for listing on the NASDAQ Capital Market, which Defendants
learned about through SCR’s business relationship with Company C.
3. In another instance in May 2014, Napodano and Basrai traded securities while in
possession of material nonpublic information Basrai received when he was personally solicited
by another investment banking firm as a potential investor in a secondary public offering by a
biotechnology company (“Company D”). Basrai had affirmatively agreed not to use, trade on, or
disclose any confidential information about the company or the transaction, but breached this
duty when he traded in advance of the announcement of the offering and passed the information
to Napodano.
4. Defendants also traded while in possession of material nonpublic information
regarding the timing and substance of SCR-issued research reports. Between August 2012 and
June 2015, Napodano traded profitably around the publication of 42 SCR research reports he or
his subordinates authored. The reports were the property of SCR and Napodano owed a
fiduciary duty to SCR to maintain their confidentiality until they were published. In July 2014, Basrai and Stirton also traded in advance of the publication of one of these SCR-issued reports,
which they learned about through LBMZ’s business relationship with SCR.

I actually liked the detail of Jason's reports. I didn't always agree with his forecasts but he tended to have very detailed reports. I never paid for one nor did I ever invest in any company. I guess maybe the p-and-d part explains why He/Zacks would give some away for free.

I guess his leaving Zacks makes sense now but I'm not sure if his current gig is in jeopardy (didn't look up the exact definition of penny stocks nor do I know what he covers now).