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<<Obviously a disgruntled employee who was fired with cause>>
The cause was obviously Mr. Klein was not a "yes man" to CEO Gregory A. Demopulos.
<<Gregory A. Demopulos... in an interim capacity, as our chief financial officer and treasurer since January 2009.>>
What is Demopulos' training in accounting and corporate finance that makes him qualified to serve as the chief financial officer and treasurer of a publicly traded company even only in an interim capacity?
Why wouldn't they do as is usually the case, have a board member, say the audit committe chairman fill an interim role, while the search runs its course. Maybe the board member had no interest in signing the SEC docs and certifications .. CEO Gregg did it in all fidudciary capacities.
Now I may be magic's eunuch (pretty good squidster) but I know it ain't right to have the chicken coop guarded by off leash canine inside cronies while the CFO role is unoccupied. Anyone know the audit committee chair and the level of involve ment in financial oversight ?
Scandal Provides Another Reason Omeros Might Not Be the Biotech IPO Bellwether
By Trista Morrison | Nov 10, 2009
As more biotech companies queue up to try their hand at an initial public offering, there’s scandal-driven evidence that Omeros Corp.’s recent IPO flop may not be indicative of investor appetite for the biotech sector.
Omeros has so far been the only “true biotech” (i.e. money-losing, developmental-stage biotech) to go public in the current IPO window. The company priced at the low end of its target range and has so far been among the worst performers of all U.S. IPOs this year, according to Renaissance Capital.
But as BNET previously noted, Omeros might not be the ideal biotech to benchmark against. For starters, the company was a holdover from the last IPO window, which indicates persistence perhaps to the point of desperation. And while Omeros is in Phase III trials, its lead product is a generic combo drug for surgical applications (though heck, generic combos haven’t drawn disdain in the obesity sector).
Now Luke Timmerman over at Xconomy reports that Omeros has been accused of “submitting false timekeeping records to the National Institutes of Health for grant work.” The company’s former chief financial officer, Richard Klein, says he was fired for blowing the whistle on the scandal. Omeros said it did not overbill the NIH.
The Xconomy article also states that Klein accused Omeros of “making false statements” regarding the incident in its IPO prospectus, and it recounts Klein’s previous accusations regarding Omeros CEO Greg Demopulos‘ questionable tax practices:
For example, in 2007, according to Klein’s complaint, Demopulos exercised stock options “and attempted to avoid reporting the taxable income or paying the taxes resulting from the option exercise as required by Federal tax law.” After Klein found this out, his complaint says, he required Demopulos to report the taxable income to the IRS.
All of this could mean that Omeros’ poor IPO performance is tied to factors other than the company’s “biotech” status. One banker likened Omeros to Acusphere, a drug delivery firm that’s lackluster IPO at the beginning of the 2003 window did nothing to deter investor interest in subsequent biotech offerings.
For the sake of all the other biotechs waiting in the wings to go public, let’s hope that’s the case.
Enough of this, I know Mr. Klein from industry association, worked one mile south on I-405 when Rick was CFO of Sonus Pharma in Canyon Park, met him at the Thai Rama restaurant and McDonalds there a time or two. His record is sterling from his days as a CPA at KPMG, arguably the most sucessful global accounting firm, ATL Ultrasound,a very succesfull medical device NASDAQ public company also located in Canyon Park, and Sonus
Each in senior Financial management positions.
One can never say never, Bernie Madoff, founding member of the NASDAQ, being a recent example, but it would sure be a MAJOR character reversal. Really and truly, in one year's bell curve of outliers just how many respected professionals in one year can fall into the 3 std. deviations out category of a wolf in sheep's disguise?!
What odds do U give me that there is substance, and no disgruntlement to the lawsuit?
Have no equity interest in this issue just keeping up on the Seattle biotech scene, and in this case amusement benefits, can be as good as dividends.
check it out on page 4 - 5, of the lawsuit.
Omeros CEO awards options to his brother, a DOD member and preferred employees.
Assuming its correct which you have to do with a filed lawsuit, cn't be a fabrication by CFO and his dcounsel,
Nice ... so whose got the professioalism issue the CFO or the CEO / Board. I don't know, but it reeks doesn't it?
How many of you accredited investors have ever seen stock options issued at different prices at approximately the same time ... Gotta be a SARBOX issue or two with one person holding the titles of CEO, Head of HR, Chief Accounting officer, etc. Where's the Chair of the audit committee other than a coodenfendant in the suit ?
No big deal that nuisance lawsuit, cj wants more stock!
OK, Maranto for the sake of others due diligence to come to your conclusion Maranto , why did the chairman of the audit committee quit with same timing of the complaints being brought to the Board of Directors ... just happenstance?
Is Mr. Klein lying in his filed complaint about the chain of events through audit committee chairman resignation and retaliation by firing the CFO?... will he do so under oath during a jury trial.
Buy some stock all of you high risk tolerant investors.
X agrees we are possibly onto something here, will the bio-tech funds take that risk. Really need them to get OMER shareholder's reward , a flying high share price for the risk they took, POSSIBLY higher now than when signing up for the IPO shares ??
The truth will likely be somewhere in between the CFO's allegation and the Company's shrug off, as always, the loser will point to semantical misunderstanding(depends on what the meaning of 'is 'is'). Be advised a USA president can do it, so could a ceo/cfo/cao/cto
Most won;t take the risk in this era of scandals, but cj, Scoop up those shares cj at black Friday prices ... and may the force be with you.
Happy Turkeyday everybody. Count your blessings, thank a few in your life that are looking out for you ... there is more to life than picking the next high flier.
Yeah right, the CFO would right in his filed complaint include non-factual information like the audit committee chair quitting.
He wants his claim blown out of the water like a sitting duck in his wrongful termination, whistle blower retailitation case. Why wouldn't he?!
Omeros' response to Klein's lawsuit. An interesting read. The only thing Omeros seems guilty of is making a bad original hire of Klein.
as to how this is so OBVIOUS ... suit makes the same heavy acusations that have brought down government contractors. Are you privy to Omeros H.R./ recruiter process on this CFO coming in to help the company get a going public process in order culminating with the original S-1's filed long before the markets busted for anything risky.
With the sting still fresh the market does not look kindly at risk. Don't know if its all this CFO talk, the science, disbelievers in the IP that is sending RISK, RISK, RISK signals to the market for new equity into biotechs.
Only thing we know is the post IPO share price has been ugly, ugly, ugly