Advanced Cell to pay $4.1M over alleged stock violations
Advanced Cell Technology of Marlborough agreed last week to pay $4.1 million over the next 18 months to settle claims by the U.S. Securities and Exchange Commission that the biotechnology firm sold billions of shares of unregistered penny stocks.
Advanced Cell, which didn’t admit or deny the allegations, will pay $3.5 million in profits it allegedly gained as well as interest of $586,619, according to a judgment issued by a U.S. District Court judge in Florida.
The alleged violations occurred in late 2008 and early 2009 under former CEO William Caldwell IV, who died in 2010.
Between September 2008 and January 2009, financier Mark Lefkowitz – who allegedly developed the plan – bought Advanced Cell’s debt under a settlement agreement, then filed 13 lawsuits against the company to collect on the debt. Advanced Cell then issued more than 260 million shares of stock – which it claimed was exempt from federal registration – to pay to settle the cases.
However, the shares had a value of $9.2 million, while Advanced Cell’s past due debts totaled just $1.1 million. Some $3.5 million of the extra money went to Advanced Cell, with the remainder going to Lefkowitz and his associates.
The SEC’s litigation against Lefkowitz and four other defendants is ongoing.
Advanced Cell lost $5.7 million in the third quarter of 2013 and had just $4.9 million cash on hand. The company didn’t respond to a request for comment.
(Image credit: freedigitalphotos.net)
WBJ Web Partners
Most Recent
Most Recent
0 Comments