Did Sequenom Insiders Sell Stock Before Data Corruption Was Revealed?
Just when you think it can't get any worse at Sequenom (SQNM), it does: Three employees sold stock in the company before it was discovered that the firm's R&D data on its diagnostic test of Down Syndrome was filled with "inadequately substantiated claims, inconsistencies and errors." Those employees either resigned or were fired in September when Sequenom confessed that its T21 diagnistic test product was back to Square 1.
CEO Harry Hixson told investors:
None of the officers named in our proxy statement sold any stock, but our special committee did find that one officer, who resigned in September had previously sold some stock to make a down payment on a house. This sale was properly and timely reported on SEC Form-4. Two other lower-level employees whose employment was terminated in September had also previously sold stock.You can see Sequenom's insider transactions here.
The officer who resigned was Steven Owings, according to Dow Jones, who oversaw commercial development in prenatal diagnostics. He sold $436,600 worth of stock on March 24, 2009, just days a month before Sequenom's April 29 announcement that its data was corrupted. The sale netted him about $300,000.
In September, Sequenom fired seven people, including its CEO, over the data implosion.
There are currently five different types of investigation or litigation going on against Sequenom related to the T21 disaster. They include: several shareholder suits, a derivative suit, an SEC probe (which began after the April announcement but before the September announcement, suggesting that the feds were curious about the insider trades before the company announced them), and inquiries by the Department of Justice and NASDAQ.
The executives involved deny wrongdoing.