The CEO of Emergent BioSolutions is in some serious hot water. He was the mastermind of the immensely flawed Johnson & Johnson vaccine rollout. That alone would have been bad enough, but it appears that the man has just been caught with his hand in the cookie jar. By that, I mean he just had an extremely convenient MASSIVE sale of stock. There is a scandal with a capital “S” brewing, and it appears that CEO Robert Kramer is in a cowardly panic. Emergent has lost half of its value after it had to disclose to the public that it had fouled up 15 million doses of the Johnson & Johnson vaccine at their Baltimore location. The other problem? Well, apparently the CEO unloaded about $11 million of his company’s stock (about 97,849 shares) and the timing and “good fortune” of the CEO’s stock sale is raising some suspicious eyebrows.
Of course, officials at Emergent were quick to do damage control, with Emergent spokeswoman Nina DeLorenzo noting that the sale of this stock had been scheduled as far back as November 13th so that they could avoid any appearance of impropriety.
“Mr. Kramer’s sales have been previously scheduled under the 10b5-1 trading rules,” DeLorenzo said. “Mr. Kramer and the rest of our executive team including our board of directors are always held to the highest ethical standards, following the letter of the law with strict compliance to everything. That is why an insinuation of wrongdoing is without merit.”
That Isn’t the Scandal Though
There is a problem with this theory. Apparently, Emergent had another incident reported by the New York Times in October. Kramer might have been motivated to arrange the November sale to plan for future problems. Additionally, before that, there was YET ANOTHER incident in July that was reported by the Washington Post that disclosed that Emergent had lost $19 million in abritration for damages due to study participants partaking in an experiment vaccine composed of ricin. Apparently, this vaccine was “outside of specification.”
Additionally, April 2020 had some additional problems for Emergent, such as the following:
“In April 2020, an FDA inspection concluded that there were violations at the site in Baltimore. This included inadequate employee training and failure to testing guidelines and procedures.”
Okay, folks, so are you still with me? Let’s put the final piece of this puzzle together…what most likely happened after this would be that Mr. Kramer saw a pattern of serious failures occurring at the company, so as a typical, greedy CEO, he made arrangements in November to reduce his financial impact and hedge against any additional losses he might have had based on his tremendous insider knowledge.
There’s Blood in the Water, and Investors are Smelling It
Mr. Kramer, his fellow executives, and the corporation itself are now the subject of lawsuits from their investors in the Federal Court in Maryland. They are alleging that the company was involved in pumping up their stock price because of continually making unrealistic claims. Moreover, they omitted some serious issues regarding their ability to manufacture these COVID-19 vaccines. There are now three (count ’em, three!) law firms that are digging into the filings of this company, and the underhanded dealings of the CEO are causing this company a tremendous legal mess. However, don’t feel no sympathy for this man, because he only has himself to blame.
What do you think? Your comments are appreciated!