Cumberland Pharmaceuticals, Inc. (CPIX)

[XenaLives]

Long term 15 day chart -

Again, disproportionate volume recently.



2010 options program instituted:
https://investor.cumberlandpharma.com/node/8981/html

Issues with employee redemption during IPO:

Cumberland Pharma employee sues over stock options
ERIN LAWLEY JUL 8, 2010
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A Cumberland Pharmaceuticals employee has filed suit against the company, alleging the firm violated his stock option rights, preventing him from maximizing his profits.

The complaint, filed in Nashville's U.S. District Court late last month and available at this link, says Paul Boersig, a hospital sales representative, entered into a pair of incentive stock option agreements in 2003 and 2005. It alleges the company honored only the options from the 2005 plan and that, when Boersig wanted to exercise those options, it presented a series of hurdles that effectively limited the amount of money he could recover from his trades.

The latter point specifically relates to Cumberland’s $85 million initial public offering in August of 2009. The company notified employees that they could not trade their options during a 180-day "lockup period" following the IPO, but that they must wait for a “trading window” following the company’s release of its 2009 year-end financial results.

According to Boersig’s complaint, however, the company provided none of the promised communication on how employees could go about exercising their options once the trading window opened and "twice refused" Boersig the opportunity to purchase shares after he had acknowledged "that it was his intention to sell the shares during the trading window."

Though Boersig did succeed in selling the bulk of his shares, the "deliberately cumbersome" process kept him from exercising all his options. In addition, he later discovered the company permitted its senior vice president and corporate secretary to exercise options prior to the conclusion of the lockup period, at a higher per-share price.

"Cumberland engaged in a course of conduct designed to thwart Boersig's rights to trade his options pursuant to the plan, and for him to recognize as many losses as possible, contrary to its fiduciary obligations to him," the complaint reads.

Boersig is seeking unspecified damages related to violation of the Employee Retirement Income Security Act, breach of contract, breach of fiduciary duty and breach of duty of good faith and fair dealing.

Anne Martin of Bone McAllester Norton filed suit on behalf of Boersig.

In a statement emailed to NashvillePost.com, Cumberland Pharmaceuticals said it "works hard to balance the interests of patients, shareholders and employees" to provide them value. "Compliance with all federal equity and other regulations is of utmost importance at Cumberland, and the company believes it has operated and continues to operate with strict adherence to such regulations," it said.

https://www.nashvillepost.com/business/health_care/cumberland-pharma-employee-sues-over-stock-options/article_3c7305b6-4d9d-51a1-94dd-47d07e7a9c36.html