Legal News

Feds Allege Former Exec Fibbed About Cancer to Dodge Suit

By Dan Slater

A cautionary tale for your consideration, Dear LB Readers: According to this report in the Boston Globe, the feds allege that a former exec at Biopure, a Cambridge-based biotech company, lied to a federal judge when he said he was gravely ill from colon cancer. He was allegedly trying to dodge a suit over problems with an experimental synthetic blood product.

Howard P. Richman, 57, allegedly falsified letters from a doctor and had his lawyers report to a judge that he had less than a 15 percent chance of survival, delaying an SEC lawsuit. Richman was indicted yesterday in federal court in Boston on one count of obstruction of justice.

Here’s the indictment.

“Anyone who lies to the SEC and the court must be held accountable,” said David Bergers, regional director for the SEC’s Boston office. “The integrity of our process and the judicial process demands complete honesty,” he said.

The alleged lies, notes the Globe, were an apparent attempt to force a settlement in a case brought by the SEC alleging Richman and other Biopure execs mislead investors in 2003 by hyping a flagging synthetic blood product called Hemopure. The FDA had reported safety concerns with Hemopure, a blood substitute made from cow hemoglobin, citing studies that suggested it caused heart attacks and heart failure in some patients. But Biopure allegedly never told investors.

Tiana Gorham, a spokeswoman for Biopure, said the company would not comment on the indictment because Richman has not worked there since 2003. Richman’s lawyer, Thomas E. Dwyer Jr., declined to comment to the Globe.

Full post as published by Law Blog - WSJ.com on September 26, 2008 (boomark / email).