[It's getting more serious for MEDX, and the lawsuits weren't far behind.]
Thursday June 15, 6:06 pm ET
Medarex Receives Subpoena Over Stock Options Grants; Shareholders File Suit
PRINCETON, N.J. (AP) -- Biotech company Medarex Inc. said Thursday it recently received a a grand jury subpoena from the U.S. Attorney's Office in the District of New Jersey over the timing of its stock options grants.
The company has already received a letter of informal inquiry from the Securities and Exchange Commission over the matter. Medarex said it is cooperating fully with both investigations.
In addition, Medarex said two shareholder derivative lawsuits have been filed in New Jersey, naming the company and certain current and former directors and officers as defendants. Medarex said the lawsuits allege breach of fiduciary duty associated with its stock options grants practices, as well as federal securities laws violations. The lawsuits seek unspecified damages.
More than 40 companies are under SEC or Justice Department investigations looking into whether executives backdated stock options grants. This increases the value of the stock options by timing them at low points, boosting the payout.
Shares slipped 21 cents, or 2.1 percent, to $9.60 in after-hours trading, having earlier closed up 52 cents, or 5.6 percent, at $9.81 on the Nasdaq. The stock has ranged between $7.14 and $16.07 over the past year.
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