Thursday, December 15, 2011

SEC Charges GlaxoSmithKline Subsidiary and Former CEO With Defrauding Employees in Stock Plan

Stiefel Laboratories Inc is a subsidiary of pharmaceutical company GlaxoaSmithKline and was the world's largest private manufacturer of dermatology products. The SEC alleges that the subsidiary omitted information from employees and lead them to believe their stock was worth much less than it truly was. They then bought back the stock for a greatly undervalued price.

Stiefel Labs purchased more than 750 shares of company stock from shareholders between November 2006 and April 2007 at a price of $13,012 per share. Stiefel Labs' CEO knew that five private equity firms had submitted offers to buy preferred stock in November 2006 based on equity valuations of Stiefel Labs that were approximately 50 to 200 percent higher than the valuation later used for stock buybacks. There were also an additional 1,150 shares that were bought between July 2007 - June 2008 and Dece 2008 - April 2009.

SEC Charges GlaxoSmithKline Subsidiary and Former CEO With Defrauding Employees in Stock Plan
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