Sun. Oct 2nd, 2022
Covid vaccine executives hype fuzzy data to cash in on $90 million in stock, watchdog says

An anti-corruption watchdog urges the U.S. Securities and Exchange Commission to investigate executives of biotech company Moderna after cashing in about $90 million in company stock, days after promoting “positive” but vague data from the early clinical trial with COVID-19 vaccine.

The watchdog group, Accountable.US, called the timing of the transactions suspicious and questioned whether executives had coordinated their share sales prior to the release of the data.

In a letter to the SEC released to CBS Moneywatch, Accountable wrote. US President Kyle Herrig said: “This misconduct was particularly egregious because it not only involved financial fraud and financial market manipulation, but also exploited widespread fears surrounding the ongoing COVID-19 pandemic.” All in all, the exploitation of the executives served to “increase the value of the company, as well as their own bank accounts.

“I strongly urge the SEC to investigate these matters,” Herrig wrote.

Moderna is considered a frontrunner in the race for a vaccine against the pandemic virus, SARS-CoV-2. The company is testing a vaccine with mRNA, an unproven vaccine platform not used for existing vaccines. However, Moderna became prominent in the pandemic after partnering with the National Institutes of Health to design and test the vaccine. It was the first-ever vaccine to go into clinical trials, which began on March 16.

On May 18, the company issued a press release stating that eight trial participants had developed neutralizing antibodies at levels comparable to those seen in people recovering from SARS-CoV-2 infection. Moderna painted the results as “positive,” but experts were quick to note that the press release contained no data and that the scant information provided cannot be interpreted in terms of evaluating vaccine efficacy. Some also wondered why Moderna chose to release such incomplete data from a very small number of participants rather than wait to publish a larger dataset in a peer-reviewed scientific journal — which is standard practice.

Still, the press release sparked a frenzy of “encouraging” coverage, and Moderna’s stock rose 30 percent, pushing it to a record high of $87 a share. Amid the wave, Moderna’s CEO, several executives and funds controlled by the chairman of the board sold about $90 million worth of stock, according to CBS Moneywatch.

Although the company’s stock eventually fell and now stands at $59 a share, CBS notes that executives are still cashing in on millions of dollars in stock.

In a statement, Moderna defended the moves, saying, “Executive sales are made under pre-planned 10b5-1 plans, which are executed during open trading windows in accordance with the company’s insider trading policies.” The company said it would not comment on possible investigations.

By akfire1

Leave a Reply

Your email address will not be published.