COVID-19: As lab execs sell shares worth millions, questions arise

By Juliette MICHEL
This combination of file pictures shows signs for the Pfizer and Moderna pharmaceutical companies, both in Cambridge, Massachusetts; executives at both, as well as at Novavax, have raised questions by selling shares worth millions amid the pandemic Photo: AFP/File

Pfizer, Moderna, Novavax: executives at several American laboratories developing COVID-19 vaccines have recently pocketed millions of dollars by selling shares in their companies -- raising questions about the propriety of such a move in the midst of a national health crisis.

On the very day that pharmaceutical giant Pfizer announced preliminary data showing its vaccine was 90 percent effective against the coronavirus, its chief executive Albert Bourla sold shares worth $5.6 million.

There was nothing illegal about this, Pfizer said: the sale took place according to rules allowing company heads to sell shares under predetermined criteria, at a date or for a price set in advance, to avoid any suspicion of insider training.

Under the same rules, several Moderna officials have sold shares worth more than $100 million in recent months.

That company has not placed a single product on the market since its creation in 2010, but the federal government has committed to paying it up to $2.5 billion if its vaccine proves effective.

Moderna shares have soared from $19 at the beginning of the year to a current level of $90.

The boss of Novavax, for his part, sold $4.2 million in shares on August 18, just over a month after the announcement it would receive public financing of $1.6 billion.

Accountable U.S., a nonpartisan taxpayers' advocacy group, has calculated that from the start of the federally coordinated effort to develop vaccines on May 15 until Aug 31, officials at five pharmaceutical companies made more than $145 million by selling shares.

Executives at Pfizer and Moderna were operating under a rule put in place by the Securities and Exchange Commission in 2000 to allow company employees to sell shares without facing insider-trading charges.

It allows them to set up a plan determining the trades of their shares at a price, amount or dates specified in advance, but only when they are not in possession of privileged information that could affect share prices.

Once such a sale is planned, it cannot be modified at the last minute, even if its timing might ultimately raise questions.

Still, this use of the rule by Pfizer and Moderna appears "legally questionable," according to Daniel Taylor, an associate professor at the University of Pennsylvania's Wharton business school, who has been studying the big pharma firms since the beginning of the pandemic.

"The question is, what did the executives know at the time that they pre-scheduled the trade?" he asked.

Bourla, according to Pfizer, had merely re-authorized on Aug 19 a plan for a share sale originally authorized in February, "with the same price and volume terms."

But a day after that, the company issued a statement describing the preliminary results of its clinical trials as "positive."

It is of course not just normal but desirable that laboratory heads should be encouraged to develop a safe and reliable vaccine as quickly as possible, Taylor said.

But "when they are going to sell their shares, they have to make sure that they are operating by the same level playing field, that they're not taking advantage of other investors by having more information," he said.

Taylor added a word of caution: "I don't think that companies have internalized the reputational risk to these trades" by selling shares even as COVID-19 cases have been spiraling upward around the world.

When a top executive needs to sell shares to pay for a yacht, a new house or his children's education, the public rarely is aware of it. But with the pandemic raging, the laboratories are under intense scrutiny.

For Sanjai Bhagat, a professor at the University of Colorado-Boulder who specializes in corporate governance, top executives should simply not be allowed to sell company shares until a year or two after they leave the company.

"If they have a lot of vested stock and stock options, then they have an incentive to get the share price as high as they can, even by not being totally honest with the investing public," he said.

Bhagat believes corporate boards should eliminate any chance of temptation.

"Not having done anything illegal is not the standard by which they should be judged," he said. "Especially in these times, people are expecting them to act responsibly."

Contacted by AFP, the SEC would not say whether it was investigating any of the lab executives.

But in an interview in May on the CNBC network, SEC chairman Jay Clayton exhorted executives to respect best practices.

"Why would you want to even raise the question that you were doing something that was inappropriate?" he asked.

© 2020 AFP

©2020 GPlusMedia Inc.

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This is something of a surprise. Not that it is allegedly happening, but that the mainstream media - if only a tiny corner of it - is questioning the behaviour of Big Pharma execs who otherwise seem to be getting a free ride right now. Big Pharma as a collective has been portrayed as something of a hero in this internationally exaggerated crisis.

Will these execs get investigated and punished if found to have broken the law if Biden does become president? I somehow doubt it, and the same would probably be true if Trump remains in office.

-4 ( +3 / -7 )

As I thought. The vaccine is all about the money. If one is confident about their product one would naturally want to make more. What’s the hurry? Fear of unforeseen consequences? I may die but I don’t now see myself getting vaccinated.

-5 ( +3 / -8 )

talaraedokkoToday  10:42 am JST

As I thought. The vaccine is all about the money. If one is confident about their product one would naturally want to make more. What’s the hurry? Fear of unforeseen consequences? I may die but I don’t now see myself getting vaccinated.

It's partly about the money, but the vaccine is only a piece in the puzzle - a means to an end, if you like. The bigger picture is about control. The pharmaceutical industry in this for the money, which is reasonable and it's natural they would want to maximise value for their shareholders. I won't begrudge them of that, but it's worth investigating potential insider trading where suspicions arise.

This bigger issue is the Great Reset. Although the WEF has been promoting it for months, people bringing it up get dismissed as conspiracy theorists. But it's no great secret - it's out in the open although couched in ambiguous language on the WEF's own website.

But a couple of days ago Justin Trudeau really let the cat out of the bag when he said that the COVID-19 pandemic is a great opportunity to centralise power through restricting movement and association ostensibly in the name of protecting out security and the environment. Get the vaccine, and we'll give you certain privileges, you lucky little sausages! But misbehave and you're toast! Think of it as another version of China's social credit system.

Hear it in his own words (video is in the linked page)

-5 ( +3 / -8 )

I am pleasantly surprised by the earlier comments in that I am not so alone in thinking that the 'powers-that-be' did not get there (nor consolidating their status) by virtue of merit, following the letter of the law, or just fortuitous happenstance.

There may well indeed be a virus going around. Just two days ago, Kanagawa-ken (where I live) has now declared the prefecture as being in an official public health crisis. But with the local hospital's gracious 'thanks, but no thanks' response to my offer as a volunteer to help non-Japanese speaking patients ... I can't help but to raise a suspicion about the gap between the rising fear being stoked by mass media, and actual public health needs.

I am now about half-way through Michael Sandel's latest book 'The Tyranny of Merit: What Has Become of the Common Good', and am seeing a careful documentation of what Pulitzer Prize winning journalist Chris Hedges has also been saying for some time now. Reading between the lines:

The less violent levers of power in this era are:

1 - law, in the U.S., crafted by corporate lawyers, pushed by lobbyists, and rammed through rubber-stamp politicians ... but here in Japan, more often crafted by and pushed by those dominating party politics.

2 - the manufacturing of consent through, public education, corporate owned mass media, or the hidden algorithms of social media ... and in Japan, perhaps a bit more of the 'Invented Traditions' model of propaganda (Stephen Vlastos). And ...

3 - As the public influence of traditional, institutionalized religions have become neutered by their own corruption, the fetishization of STEM fields (math and science) have risen to take their place. With the arcane language of specialized science and statistical models, even the most fervently secular members of the public are usually not scientifically literate enough to identify 'questionable' studies and the perverse incentives behind them. But just following the money, researchers have got to pay the rent too, and they and their bosses depend on unquestioned faith in proclamations of institutionally sanctioned science and academia, rather than science as an ongoing, necessarily messy and incomplete process of problem solving. Remember when 9 out of 10 doctors recommended the smooth taste of Camels?

Like the fable of the scorpion and the frog, those who have built the system, are by nature, driven to game that system to their own advantage, and the above article is about as clear a vision of what may be going on behind the curtain as corporate media will allow the public to see. Let's just see how long it stays up in the public record before being replace with a 'The requested article has expired'. I dare say that 'bread and circuses' baseball scores or interviews with Brad Pitt from 10 years ago will have a longer shelf life.

Special kudos to kyronstavic for that link.

Because the historical narrative seems to be highly selective as to what is, and remains 'newsworthy', I'll be copy-pasting this article and comments, as well as that link into my growing data-base ... for all the good that will do, or not.

-2 ( +4 / -6 )

Well said, Steve. I don't think enough people get a handle of human nature. As civilised as our Western liberal democratic society is, there's still plenty of scope for power-hungry sociopaths to rise to the top - they just don't quite reach the levels of autocracy enjoyed by the likes of Xi Jinping, Putin and the rest.

In the case mentioned in this article, these execs probably think they're above the law so see no issue in breaking the rules for personal advantage and expect no punishment for it. It's not so much that they're immoral, it's that they're amoral.

-3 ( +3 / -6 )


Both announcements [Moderna's and Pfizer's] came in the form of press releases — with neither company providing the actual data behind their claims. Though efficacy rates in the ninetieth percentile were enough to make Wall Street and most media outlets swoon, at least one publication, STAT, pointed out what the companies themselves didn’t: Both trials are ongoing, and as they continue, efficacy rates could decline, as “it’s often the case that a vaccine performs less well in the real world than it does in the setting of a clinical trial.”

STAT also noted that neither company can yet say how long the vaccine, which in both cases is administered in two doses, will provide protection as that “can only be determined over time as large numbers of people are vaccinated.“

Both drugmakers said they will seek Emergency Use Authorization from the U.S. Food and Drug Administration (FDA) for their experimental vaccines as soon as they meet the criteria. The authorization, which allows vaccine makers to skip standard mandatory safety and compliance inspection of their vaccine manufacturing facilities, is a winner-takes-all-prize awarded exclusively to the first COVID vaccine approved by the FDA.

So they are desperate to be first. How honest are they? Have they perhaps deliberately withheld important information and data, just to reap greater rewards from the stock market that has responded to their press releases.

-3 ( +3 / -6 )

There is nothing like a disaster or pandemic to bring out the very basic human instincts. Greed and the need to exploit. Is it any wonder nature could have decided humanity need a kick up the backside.

3 ( +4 / -1 )

Why not? If I had shares of Moderna, I would not have cared care about people's opinion on how appropriate the selling off was. When you own 'stonks', metals or crypto, it is all about making money, ethical issues don't matter.

-7 ( +0 / -7 )

Questions arise? No, answers become clearer. Cashing in, before the lies are widely recognized. That stupid talking about so many successful vaccine developments and a very soon return to normality is only fake or hope spreading to keep the masses optimistic and willing at their daily exploitation points. The only thing that works against that biohazard is a strict and well planned and exemptionless lockdown for about seventy days and nothing else. That’s the known maximum time span those corona viruses can survive undetected. So consider to add another two- or threefold sigma to assure the success, if you ever go that path that I personally recommend to get rid of that problem catalog.

-5 ( +1 / -6 )

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