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Echo Therapeutics, Inc. Message Board

  • wallstreetisgreed wallstreetisgreed Aug 8, 2013 1:03 PM Flag

    The Chairman of the Board is MOONEY

    $20 million sham financing lawsuit is against the Echo Chairman of the Board of Directors. That would be Mooney. Correct me if I'm wrong. It must have to do with improper disclosure. Even Mooney, if he discloses properly, is allowed to sell his shares in a financing. Improper disclosure of the CEO and Chairman of the Board of Directors is considered a serious fraud. Mooney's focus on Mooney instead of Echo may have finally done him in. Sad.

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    • One more albeit minor detail about the lack of proper disclosure. Less than two weeks before the offering at an analyst conference Mooney said Categorically that there would be no offering because one was not needed. Had he been vague or evasive he would have been better off. I think the direct "lie" will work against him. Although, I agree these suits actually cost us money, not win anything for shareholders. Lawyers Love them.

    • When reading the full article, I understand the claim to be that the financing secured with Platinum was a sham, simply to increase the stock price so Mooney could sell into the subsequent public offerings. I'm assuming the evidence is based on the following.

      1) Platinum financing was claimed to be enough to bring Symphony through pivotal trials.
      2) SP Rose after Platinum Financing was secured.
      3) Echo then had two public offerings, which decimated SP and Mooney sold into one of these public offerings.

      As a note, Echo announced one offering prematurely, which probably hurt investors (and Mooney's take on his sale) as well. I believe when the first offering was officially announced, the SP was much lower likely due to this false announcement.

      Echo did not need the public offerings due to Platinum financing. Terms of Platinum financing prevented dilution under a set price and both funding raises were below this price. Much of the first public offering after Platinum's financing went directly to paying off the initial draw on Platinums Credit Facility.

      I guess the argument is that Echo secured financing with Platinum, not to further development, but to try and temporarily raise the sp (sham) so Mooney could get more from a public offering, meanwhile deceiving investors on their financing needs leading to a decimated SP.

      DDBuyer posted comments on a Seeking Alpha article that the Platinum's financing was destroyed due to Mooney's selfishness or something to that effect. This lawsuit seems to be inline with DDBuyer's comments.

      There were definitely many missteps, selfishness or outright deception with the financing over the past year severely hurting investors. I wouldn't be surprised if this lawsuit has merit.

    • So if he sold his own shares in the offering, he didn't get too much for them, did he?

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