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ViroPharma Incorporated Message Board

  • golong_getshorty golong_getshorty Aug 10, 2007 12:02 PM Flag

    Letter to SEC (copy and send...)

    Below is a letter I sent to the SEC this morning. Please feel free to copy and paste it in an email yourself. Not sure it would do any good, but it may make you feel better...and the more they hear from common investors the better. SEC email address is enforcement@sec.gov <enforcement@sec.gov>.

    -----------------

    Dear SEC:

    I believe there has been a blatant violation of SEC Regulation FD (Fair Disclosure) by ViroPharma (VPHM). I wanted to draw your attention to suspicious trading during the three trading days prior to a major announcement of material information. While this sort of activity occurs with many companies, as those with deep pockets learn of news before most common investors, I believe the gravity of this event merited an email to your office.

    On August 10, ViroPharma announced the discontinuation of clinical trials on a leading drug candidate (HCV-796). During the three trading days PRIOR to this announcement (August 7-9), the share price of the company plummeted 25% ($13.64 to $10.22) on much-higher than normal volume (4.4M shares per day vs. 0.6M to 1.5M per day); obviously conducted on an institutional level due to how the shares in the company were distributed at the time. The most recent news publicly disclosed by ViroPharma was a mere one week prior to this decline, on August 1, of outstanding financial performance (very positive news). There was no public disclosure of information that would lead investors to believe it was a good time to sell their stock for a 25% reduction in value from the previous week.

    The selling that drove the market capitalization down 25% was due to institutional investors selling. This is the only explanation in lieu of how the shares were distributed among the different groups of holders: shares shorted 19.4% (covering these shares would have caused an increase in valuation), insiders a mere 0.86% (no enough to move the share price), and the shares held by institutions 79.6%.

    An institution with a lot of money at stake learned of material information several days prior to that information being made public, and, as a result, not only avoided a large decline in their holdings after the news was made public, but through preemptive selling drove ViroPharma's share price much lower than it would otherwise have been prior to the negative news event on August 10.

    On behalf of common investing Americans, I encourage you to look into ViroPharma's violation of SEC Regulation FD (Fair Disclosure). Thank you.

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VPHM
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