SEC Charged Biotech Executive With Lying About A Test Predicting Down Syndrome
Posted Jun 03 2010 12:40am
In several appearances she stated the test was 100% accurate on whether or not a fetus would be born with down syndrome. She knew the truth and still told everyone it was perfect in essence.
The product never materialized and it misled investors at the same time. Sometimes when writing this blog I get to the point to where I really have to look at what I receive and determine what is educational and good knowledge versus “marketing” and in this case with the claims about the test, it appears that “marketing” was the key here with overzealous claims.
I have mentioned this before about some companies that are financed with venture capital funds and get low on cash, mostly in the device area to where they need sales to stay in business before the money runs out and thus you see stronger and more forceful marketing take over at times. In this case I don’t have any idea of the financials other than the fact that the company is traded on the open market. BD
You better watch out, you better not lie. Here’s the reason I’m telling you why - the US Securities and Exchange Commission is threatening to come to your town if you lie about your data. The SEC has just charged Elizabeth Dragon, a former senior vp of R&D at Sequenom , with lying during at least three public events where she made presentations to analysts and investors about a prenatal test for Down syndrome. She is now barred from serving as an officer or director of a public company, but didn’t admit or deny any of the charges. A financial penalty comes later.
The SEC alleges Dragon falsely claimed the test’s “highly accurate results” were obtained on a blinded basis, but she provided her scientists with known outcomes of the samples, which allowed them to manipulate the data and produce more accurate results. Dragon falsified the number of samples allegedly tested and lied about how well the test worked, claiming it produced unambiguous results. But the SEC says the results were often difficult to interpret, and Dragon needed to unblind the outcomes.