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 email@example.com <firstname.lastname@example.org>.
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.
Let me say, I'm not an investor in this company, but know someone that was burned by VPHM. Here's the thing though, in this case -- the insider selling provided warning signs that something was going on. Could have minimized your losses, whereas with just the announcement, you would have taken it abruptly. The declines over the past week may have driven the price down a little too much, and I think you'll see a little bit of a recovery to $9 range over the next few days. I know a lot of people are upset over what has happened - but the stock looks pretty cheap right now. The bottom line is it's BIOTECH, and it's human nature for people not to keep their mouths shut. News affects these stocks big time - and a lot more people get to see a failed endeavor with their very own eyes than figures from an earnings report. If you do not want this to happen to you again, then I think being long in biotech is not for you. You know if it was good news that leaked, you wouldn't have wrote that letter to the SEC, even though I agree with you 100%.
Really I saw you did noy sign the letter with your real name. Did you actually sign it with GoLong_GetShorty??
The SEC will love that. Your a real idiot. Quit making
false reports. This is a pump and dump stock.
Of course I signed it with my real name when I sent it...but I'm certainly not interested in posting my personal information on a message board if I can help it. Get real. You're on ignore.
It was suggested that the leak could have come from Wyeth or other parties involved in the study.
Rather than pointing the finger directly at ViroPharma, it may be more accurate/prudent to use the phrase "parties involved in the study (ViroPharma, Wyeth, etc.)".
Someone with inside information clearly leaked regardless of what IR is saying. It may take awhile but I do believe that in this case, the SEC will go after them. Most other drug companies do not drop 30% on high volume before results are announced. Regarding class action law suits, the last time I joined I was offered just 3 cents for every share I had. It's best not to bother, let's just file a civil suit when the SEC finds the guilty parties.
As though anyone who comitted the crime would just wither under your relentless questioning and fess up Perry Mason.
His answer probably resembled something more evasive like I have no knowledge of anyone here giving out information. The straight answer will never come out.
Kind of like last summer, when the CEO of MRVL said "it is not our policy to backdate options." A true, but misleading statement as they had no policy in place, but they did backdate a boatload of options.