Hagens Berman: Galena Biopharma Investigation Proceeds in Light of May 5, 2014 Lead Plaintiff Deadline in Securities Fraud Class Actions
SAN FRANCISCO, April 16, 2014 /PRNewswire/ -- Hagens Berman Sobol Shapiro LLP an investor-rights law firm with offices in San Francisco has intensified its investigation on behalf of Galena Biopharma, Inc. (NASDAQ: GALE) ("Galena" or "the Company") in light of the May 5, 2014 deadline to file for lead plaintiff in the securities fraud cases against the company. Investors who purchased Galena stock between May 9, 2013 and March 17, 2014 (the "Class Period") can contact Hagens Berman Partner Reed Kathrein, who is leading the firm's investigation, by calling 510-725-3000, emailing Galena@hbsslaw.com or visiting http://hb-securities.com/investigations/Galena.
The complaints, which were filed in the U.S. District Court for the District of Oregon, will likely be consolidated into one class action upon appointment of the lead plaintiff, and generally allege that unbeknownst to investors, Galena hired The DreamTeam Group and Mission IR, two affiliated promotional agents, to inflate the value of Galena common stock during the Class Period. The 240-day endeavor, which ended in March 2014, was anchored by a campaign of planting fraudulent analyst reports and news articles that touted the company, its product pipeline and a drug marketed and manufactured by the company, Abstral, according to the complaints.
The complaints state that in many instances, these fraudulent media reports were written under aliases. In all instances, the authors never disclosed that they were paid by DreamTeam to write these media reports or that Galena executives had complete editorial control over their work, the complaints state. The publication of these fraudulent media reports coincided with positive company announcements, such as successful clinical trials and the launch of Abstral, so as to have maximum impact upon Galena's share price, complaints state.
Galena's officers and directors sold nearly $10 million worth of Galena stock during the period when Galena's stock price was artificially inflated, the complaints allege.
On March 17, 2014 Galena revealed that the company learned in February of an SEC investigation involving "certain matters related to our company and an outside investor-relations firm that we retained in 2013." Galena's shares dropped more than nine percent in after-hours trading following the company's announcement of the SEC investigation. Galena stock continues to trade below previous figures, closing at $1.74 on April 15, 2014.
"If true, defendant's hiring of The DreamTeam Group to promote the company through a front of undisclosed writers seriously undermines the credibility of management," said Mr. Kathrein. "Even worse, it appears to have been a clear attempt to inflate Galena's stock price in a classic 'pump and dump' manner."
The deadline to file for lead plaintiff in the securities fraud class action is May 5, 2014.
Persons with non-public information regarding Galena should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 510-725-3000 or email one of the links above.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities. The Firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the law firm and its successes can be found at www.hb-securities.com. Read the firm's Securities Newsletter at http://www.hb-securities.com/newsletter. The firm's blog is located at www.meaningfuldisclosure.com.
Firmani + Associates
Mark Firmani, 206-443-9357
SOURCE Hagens Berman Sobol Shapiro LLP