Dallas, Texas 04/14/2014 (FINANCIALSTRENDS) – Galena Biopharma Inc (NASDAQ:GALE), which is a mid cap drug maker has seen its share price come under severe pressure of the bear market, ever since it reported on 17th March, that it has received communication from the SEC on the firm being investigated for breach of public trading rules. This news snippet was slipped in by the drug maker along with its 4Q13 operational update to SEC, which was filed on the same day. Since then the share price of the stock has dipped by a huge 31 percent.
In the form 10 K, Galena Biopharma Inc (NASDAQ:GALE) has disclosed that in February of this year, it became aware of the ongoing SEC investigation into episodes of working relationship between the drug maker and an investor relations/ PR firm which it had engaged in the 2013 time frame. The drug firm went on to assure its investors that it was in regular contact with the SEC and is fully co-operating with the ongoing investigations.
The SEC investigations are linked to allegations that the drug maker had retained the services of a investor research and stock promotion firm “The DreamTeam Group” in 2013, thanks to which favourable and appreciative financial articles promoting the stock appeared in online forums. The investigations are looking into the episode where in articles talking up the prospects of the drug maker were filed online under various pseudonyms, which translates to wilful and intentional impersonation on part of the PR firm to deceive investors.
It is of import here to note that on the back of multiple glowing write ups about company’s prospects started to appear in the last few weeks of 2013 and January of this year, the share price almost tripled in the period. At that time a whole host of company insiders had sold their stock holdings at the inflated pricing and thus made a killing.