Emerald Health Pharmaceuticals President and CFO forced to resign amid SEC extortion charges. Emerald Health Pharmaceuticals, a pharmaceutical company specializing in mental health medications, has been thrust into the spotlight after its President and CFO have been forced to resign amid SEC extortion charges.
The SEC alleges that the two executives accepted kickbacks from a supplier in exchange for awarding them business contracts. It is not the first time Emerald has come under fire, as it has faced criticism for its high prices and aggressive marketing tactics.
Emerald Health Pharmaceuticals
The problem started when the SEC investigated Emerald Health Pharmaceuticals for possible fraud. The company was accused of inflating its financials to make itself look more successful than it was.
The pharmaceutical company caught the attention of the SEC, who then began an investigation into the matter. Unfortunately, it seems like things have worsened for Emerald Health Pharmaceuticals.
The SEC alleges that the two executives accepted kickbacks from a supplier in exchange for awarding them business contracts. Emerald is now facing an uncertain future, with its stock price crashing and investors fleeing.
The company has hired a new law firm to help it fight the SEC’s charges, but it remains to be seen whether Emerald can recover from this scandal.
Not the First time Emerald has come under Fire
It is not the first time Emerald has come under fire, as it has previously faced criticism for its high prices and aggressive marketing tactics. The company has previously criticized its high costs and aggressive marketing tactics.
However, this latest incident with the SEC is the most serious. The President and CFO have both stepped down as the company fights extortion charges from the federal government. It isn’t an easy battle for Emerald, but hopefully, they can come out unscathed.
The CBD-focused company, which has a sclerosis drug in phase 2 trials, and the two executives each received so-called “Wells notices” from the SEC stating that the agency recommended enforcement action on several fraud allegations.
An SEC filing from the company dated July 8 showed that the alleged violations related to sections 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act of 1934, which cover fraudulent practices.
They are also related to section 10(b) of the act, which makes it unlawful to “use or employ, in connection with the purchase or sale of any security” a “manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.”
Emerald Health CEO and Director Jim DeMesa resigned because of the SEC notice and not because of a disagreement with the company, the biotech stated.
CFO Lisa Sanford also resigned, according to the announcement. Emerald Health board Chairman Jim Heppell thanked both executives for building the business into clinical-stage biotech.
The company’s lead asset is EHP-101, an oral compound with an active ingredient derivative of CBD and in phase 2 clinical trial for treating systemic sclerosis and multiple sclerosis.
Its second candidate, EHP-102, is in preclinical development for Parkinson’s and Huntington’s diseases.
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