BioChemics, Inc. Pays the SEC $17.9 Million For Allegedly Misrepresenting FDA Review and Drug Trial Status To Investors

 
BioChemics, Inc., a Massachusetts-based biopharmaceutical company was ordered Wednesday to pay a total of almost $18 million to the U.S. Securities and Exchange Commission. The SEC had accused the company of making false statements to investors about its collaborations with major pharmaceutical companies, FDA review of its products, and the status of drug trials of the company’s main product. BioChemics also allegedly created fraudulent valuations of the company’s stock in order to raise millions of dollars from investors.
The SEC originally filed an enforcement action against BioChemics, the founder and former CEO, John Masiz, and two promoters, Greg Kroning and Craig Medoff, in December 2012. The SEC complaint alleged that from 2009 until mid-2012, BioChemics and the defendants raised at least $9,000,000 from approximately 70 investors by misrepresenting, among other things:

That BioChemics had ongoing research and development collaborations with certain pharmaceutical companies when in fact the collaborations with those companies had either never begun or had ended;
That BioChemics had two drugs currently under FDA review, when in fact it had no products under any type of FDA review;
The status and results of clinical trials for BioChemics' drugs; and
That certain purported valuations of BioChemics at between $500 million and $2 billion were independent and reliable when they were not.

The complaint walks through the alleged misrepresentations, for example, a...

Source: Policy and Medicine - March 27, 2015 Category: American Health Authors: Thomas Sullivan Source Type: blogs