Now that everybody relies on the Internet for news, it is potentially a bigger problem. In order to succeed, manipulative schemes must usually remain undisclosed to the general public. These sales were not made pursuant to a pre-arranged Rule 10b trading plan, and Ahn had not sold any Galena stock on the open market in the previous four years. The court also found the plaintiffs in that case adequately alleged Kriegsman’s scienter. Although the Consolidated Complaint does not identify specifically which articles were approved by Ahn and specifically which were approved by Bernarda, the email exhibits to the Special Committee Report, incorporated by reference, show that the articles were sent to both Ahn and Bernarda at the same time and knowledge of their contents can be imputed to both of them, regardless of who made the specific approval on any given article. Green , U.

Plaintiffs do not, however, allege with particularity Bernarda’s scienter with regard to Lidingo during the relevant time period. Benzinga closed down its external blog allegedly used by Bjorlin’s company to post paid articles about companies. To the contrary, Plaintiffs allege that Bernarda stated that she was told by Ahn that he had not renewed Lidingo’s contract. It does not appear that Meyer has been served in this action. DreamTeam and Lidingo would also monitor social media, post on electronic message boards and blogs, and send email blasts relating to Galena.

Be the first to comment Hide Comments. Although the alleged scheme involves allegedly false and misleading statements in some of Galena’s publicly-filed documents and in published articles, Plaintiffs also allege additional conduct.

Plaintiffs awarenes not, however, allege with particularity Bernarda’s scienter with regard to Lidingo during the relevant time period. Dunlap, Remy Bernarda, and Mark Schwartz.

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He sold anothershares three trading days later, on January 22,representing approximately After that discovery, those aliases stopped being used by DreamTeam. Plaintiffs allege that Galena’s Code of Ethics, adopted in Januaryis false or misleading because Galena’s officers and directors violated it when they engaged in insider trading in January The usual practice by the Compensation Committee had been to grant stock options to Galena’s officers and directors in January of any given year.


Scheme created fake news stories to manipulate stock prices, SEC alleges

Kriegsman was “insistent” but ultimately did not sell until approximately one month later, on January 17, Unlike in Reesea reasonable investor could view the representation that Galena had not taken any action to manipulate its stock price as certification of that fact. The Consolidated Complaint alleges that these were all direct sales and not made pursuant to any pre-arranged Rule 10b trading plan.

Merle writes for the Washington Post. HuddlestonU. This provision “‘is particularly designed to meet the evils of the ‘tipster sheet’ as well as articles in newspaper or periodicals that purport to give an unbiased opinion but which opinions in reality are bought and paid for. Plaintiffs allege that Chin had not sold any of his personally-held Galena stock in the previous four years. The scheme allegedly began to unravel as news of the insider trades entered the market.

Scheme created fake news stories to manipulate stock prices, SEC alleges – Los Angeles Times

The limited disclaimers on “tip-us” or DreamTeam’s website demonstrate the importance of the requirement that paid promoters disclose the paid relationship within the publication itself. In the latter, the proceeds of the sale go to the issuing company. The Court notes that the Ninth Circuit’s interpretation that claims under Rule 10b-5 a and c require conduct in addition to alleged misrepresentations and omissions has recently been expressly considered and rejected by the Securities Exchange Commission in formal adjudication.

The Court analyzes the remaining elements of Plaintiffs’ securities fraud claim against Dunlap, however, so that if an amended complaint is filed and Plaintiffs cure the deficiencies identified by the Court with regard to the allegations of Dunlap’s scienter, the parties have the benefit of the Court’s ruling regarding all of the other elements of a claim for securities fraud raised in Defendants’ motions.

As the signor, Ahn, and Galena through him, are the makers of the allegedly false or misleading statements contained in the Underwriting Agreement. Most of the articles were written under false aliases, including obvious aliases like “Kingmaker” and “Wonderful Wizard.


In a November 13, email, Bjorlin asks Dunlap to provide her with a copy of “the option agreement and any necessary doc[ument]s associated for the execution of the option shares awarded Lidingo from our agreement. In an email exchange with the Washington Post, Bjorlin said: For the following reasons, the pending motions to dismiss are granted in part and denied in part.

To the contrary, Plaintiffs allege that Bernarda stated that she was told by Ahn that investir had not renewed Lidingo’s contract. After the February 13 and 14 articles, Galena’s stock price fell 14 percent.

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Finally, Ahn’s insider stock sales support a strong inference of scienter. The allegations specific to Dunlap in the Consolidated Complaint are that he: The Court further finds that articles touting Galena published by purportedly experienced investors on highly-regarded investment websites are documents on which an investor presumably would rely.

In early summerGalena did not have any open contracts with either company. By way of example, on or about August 6,DreamTeam submitted to the online investment advice website Seeking Alpha an article entitled “Galena Biopharma Presents an Attractive Investment Opportunity.

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Plaintiffs assert numerous allegations relevant to Ahn’s scienter. Gravitt informs the public that he is suspicious of stocks that are heavily touted on the internet and he researched Galena’s heavy internet promotion.

Fentanyl can be abused and has been resold as a street drug. At the pleading stage, acmpaign, the plaintiff need only allege that the decline in the defendant’s stock price was proximately caused by a revelation of fraudulent activity rather than awarenes changing market conditions, changing investor expectations, or other unrelated factors.