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NeuroSearch convicted for share price manipulation

NeuroSearch has been convicted for share price manipulation in Denmark.

On August 8, the company was convicted in an action brought by the Danish State Prosecutor for Serious Economic and International Crime claiming that NeuroSearch was guilty of share price manipulation contrary to the rules of the Danish Securities Trading Act. NeuroSearch has now been ordered to pay a fine of DKK 5 million.

According to a statement, the action arose out of NeuroSearch’s announcement of February 2010 in which the company presented top-line results from a clinical phase III study regarding the drug candidate Huntexil. Two months later, NeuroSearch published an amended announcement to the market concerning the study results from February 3, 2010.

The Court held NeuroSearch liable for the announcement containing incorrect or misleading signals about the price of the company’s shares contrary to the prohibition against share price manipulation. The claim against the company’s then CEO was also approved.

Karin Garre, chairman of the board of NeuroSearch, stated that the company was surprised to hear the about the court’s ruling.

“We are very surprised and deeply disappointed by the Court’s ruling that the results from a clinical study presented by the company in 2010 contained share price signals which were so misleading that it has been deemed share price manipulation. This perspective of the situation is not shared by NeuroSearch.”

The company now has two weeks to decide whether to appeal the District Court judgment to the Danish High Court.