Millions of dollars are lost as two biotech executives defraud investors by boosting stock prices with fictitious COVID-19 and HIV medication trials.#Crime #Vancouver, Washington, Washington
VANCOUVER, WAT On Monday, two executives from a Washington biotechnology business were found guilty of misleading investors regarding the development of a medication that might cure COVID-19 and HIV. The U.S. Department of Justice revealed the convictions on Tuesday, underscoring the seriousness of the conspiracy that manipulated CytoDyn Inc.’s stock price.
Convictions of Nader Pourhassan and Kazem Kazempour
Kazem Kazempour, 71, of Potomac, Maryland, was the CEO of Amarex Clinical Research LLC, and Nader Pourhassan, 61, of Lake Oswego, Oregon, was the CEO of CytoDyn.
CytoDyn hired Amarex to oversee clinical trials and serve as its point of contact with the FDA in the United States. A federal jury ruled that between 2018 and 2021, the executives misled investors about the status of a medication that treats both HIV and COVID-19, leading to their conviction on fraud counts.
In an attempt to increase CytoDyn’s stock price, Pourhassan and Kazempour were charged with fabricating information regarding the drug’s development and FDA approval. The case highlights the grave repercussions of corporate deception, particularly in light of a worldwide health emergency.
The Fraudulent Scheme to Inflate Stock Price
CytoDyn applied for FDA clearance of their medication between 2018 and 2021, stating that it could treat COVID-19 and HIV. Pourhassan and Kazempour, however, conspired consciously to mislead the public and investors. The executives misrepresented that the medication had been sent to the FDA for approval in the spring of 2020. In actuality, they were aware that the application was lacking and would not be examined by the organization.
Pourhassan misrepresented the outcomes of the drug’s clinical trials in addition to deceiving investors about the drug’s status. Even though he knew the trials had failed, he made misleading statements regarding the drug’s efficacy and chances of FDA approval. During the peak of the COVID-19 epidemic, when investor interest in possible remedies was at an all-time high, these misleading statements were made.
Due to their dishonest practices, CytoDyn was able to obtain almost $300 million from investors. Profiting from the soaring stock price, Pourhassan sold more than 4.8 million shares of the company’s stock. Kazempour also benefited financially, as his company, Amarex, was paid over $22 million. Kazempour earned more than $340,000 from the plan, while Pourhassan kept $4.4 million for himself.
Legal Repercussions and Broader Impact
Both executives face serious legal repercussions as a result of the convictions. Pourhassan was convicted on three counts of insider trading, two counts of wire fraud, and four counts of securities fraud. Kazempour was found guilty of one count each of wire fraud and securities fraud.
According to Special Agent in Charge Robert Iwanicki of the FDA Office of Criminal Investigations (FDA-OCI) Los Angeles Field Office, these convictions show that people who mislead the public, including patients and healthcare providers, about the results of clinical trials will be held responsible for their actions.
The damage to investors was highlighted by U.S. Attorney Erek L. Barron, who said, “The defendants enriched themselves by the millions while investors lost due to false promises of FDA approval.”
CONNECTED TOPICS: Washington, Maryland, Oregon, and Crime
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