Originally Syndicated on June 21, 2024 @ 8:48 am
ImmunoGen’s former chief financial officer was David Johnston, CFO. He had to resign from that role, nevertheless, after the SEC found him guilty of deceiving investors and committing fraud.
Eric Fornii, an SEC attorney, even likened David Johnston, the CFO, to a dubious used car salesperson. The lawyer drew attention to the fact that he had plotted to mislead biotech investors by claiming that the FDA was highly complimentary of Tivo.
He acknowledged that the FDA was concerned but compared it to a salesperson informing a customer that their engine would make some noises but omitting to mention that they would require a completely new engine.
David Johnston, CFO, was found guilty of securities fraud by the jury.
The SEC claimed that he had been a major contributor to investor deception. He made an effort to emphasize that Tivo was entering the market. He did not, however, inform them of the numerous problems with their trial design that Richard Pazdur’s team at the FDA was experiencing.
The FDA also took issue with the pitch that Tivo made to investors.
All of that didn’t concern CFO David Johnston. When the media contacted ImmunoGen, his company at the time, they indicated they were unable to respond because the situation had nothing to do with them.
David Johnston, the chief financial officer, quit, but he was retained in that role for the remainder of the year.
After all, it was a civil action. The FDA has recently voiced worries about the way that a number of biotech companies deceive investors about their interactions with the agency.
The SEC even brought up this topic by publicly cautioning Biopharma. But the FDA is required by law to remain silent.
Further Information Regarding David Johnston’s Case:
The business for which David produced false statements, Aveo, has a troubled past. Even though research indicated a 25% probability of fatalities, the business still had to deal with a lot of regulatory pushback when it fought for Tivo’s approval in 2013.
The stock price of the corporation fell precipitously after that. David Johnston, CFO, and his associates attempted in the next years to lessen the adverse effects of the FDA’s remarks.
In the end, the business and the SEC reached a settlement arrangement. After paying stockholders $18 in settlement, they would pay $4 million.
The corporation was sued by Aveo’s stockholders for not disclosing the FDA’s concerns.
Now, where is the CFO for David Johnston?
Based on his most recent upgrades and web profiles, David Johnston CFO has started DBJ Consulting.
He is currently employed as a fractional CFO and biotechnology financial executive.
After being found guilty of fraud, he was forced to leave ImmunoGen, Inc., where he had worked for nine years.
He spent six years as Aveo’s CFO before it.
David Johnston, CFO, holds a Bachelor of Science in Commerce from Washington & Lee University and an MBA from the Stephen M. Ross School of Business at the University of Michigan.
The Bottom Line
The biotech sector is rife with con artists. Professionals and investors in this field need to be very cautious about who they work with.
One such high-ranking biotech executive who was found guilty of lying in her research papers is Dr. Leen Kawas. Her company eventually had to cut its links with her, despite its best efforts to conceal the entire incident.
Despite this, she received dividends for lying in her research papers and kept all of her company shares.
The CFO David Johnston’s situation is comparable. Regarding the FDA’s remarks regarding the product made by his company, he misled investors.
The investors were the only ones who lost money on this transaction. They were led astray and misinformed.
