ImmunoGen’s chief financial officer used to be David Johnston’s CFO. But he had to give up that job when the SEC said he had cheated clients and misled them.
Eric Fornii, an attorney for the SEC, even said that David Johnston’s CFO was like a shady used car dealer. The lawyer said that he had plans to trick biotech investors out of their money by telling them that the FDA had a lot of good things to say about Tivo.
He did say that the FDA had some worries, but it was like a seller telling a customer that the engine might make some noises but not telling them that they need a whole new engine.
The judges decided that David Johnston CFO had lied about stocks and bonds.
The SEC said that he played a major role in cheating investors. He tried to get people to believe that Tivio was going to be on the market soon. But he didn’t tell them that Richard Pazdur’s group at the FDA had a lot of problems with the way their study was set up.
Also, the FDA didn’t like how investors were told about TiVo.
David Johnston CFO didn’t seem to care about any of that, though. ImmunoGen, where he worked at the time, told the reporters that the case has nothing to do with them, so they can’t say anything.
David Johnston CFO quit, but he stayed on as chief financial officer for the rest of that year. After all, it was a legal case. The FDA has recently said that it is worried about how some biotechs tend to confuse investors when they talk about their work with the agency. SEC has even brought this up by telling biopharma to be careful about this. But the FDA has to keep quiet because the law says so.
More Information on the Case Against David Johnston
David made false claims about the company Aveo. Aveo has had a rough past. When the company tried to get Tivo approved in 2013 even though a study showed there was a 25% chance of death, officials were not happy.
When that happened, the stock prices of the company went down very quickly. In the years that followed, David Johnston, the CFO, and his coworkers tried to lessen the bad effects of what the FDA said.
In the end, the company and the SEC reached a settlement deal. After settling with owners for $18, they would pay out $4 million.
The owners of Aveo sued the company for not telling them about the problems the FDA had found.
Where is David Johnston’s CFO now?
David Johnston CFO has started DBJ Consulting, according to his public profiles and the most recent news about him. His present job title is Financial Executive and Fractional CFO for Biotechnology.
He worked at ImmunoGen, Inc. for 9 years, but when he was found guilty of theft, he had to leave. Before that, he worked at Aveo for 6 years as their CFO.
David Johnston, the CFO, has an MBA from the Stephen M. Ross School of Business at the University of Michigan and a Bachelor of Science in Commerce from Washington & Lee University.
Conclusion
In the biotech business, there are a lot of people who try to steal money. Investors and workers in this field need to be very careful about who they do business with.
For example, Dr. Leen Kawas, a top executive in the biotech industry, was found to have lied in her study papers. Even though her company did everything it could to hide the truth, it had to cut ties with her in the end. Still, she didn’t lose any of her shares in the company, and lying in her study papers gives her dividends.
David Johnston’s CFO’s case is the same. He told investors lies about what the FDA had said about the goods his company made. The owners were the only ones who lost money in this deal. They were led in the wrong direction.
Beware of scammers like David.
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