This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

SEC Casting Wide Net in Galena Investigation

The SEC is actively investigating Galena Biopharma (GALE) and the hiring of the now-infamous stock promotions firm The DreamTeam Group.

How do I know this?  Lion Biotechnologies (LBIO) received an SEC subpoena on April 23, related to an investigation "In the Matter of Galena Biopharma Inc. File No. HO 12356," according to a disclosure in Lion's 10-Q

On April 23, 2014, the Company received a subpoena from the Securities Exchange Commission (the "SEC") that stated that the staff of the SEC is conducting an investigation In the Matter of Galena Biopharma, Inc. File No. HO 12356 and that the subpoena was issued to the Company as part of the foregoing investigation.  Galena Biopharma is an unaffiliated, publicly-held biopharmaceutical company.  In the Form 10-K that Galena Biopharma, Inc. filed with the SEC on March 17, 2014, Galena Biopharma stated that the SEC is investigating certain matters relating to Galena Biopharma and an outside investor-relations firm that it retained in 2013.  The SEC's subpoena and accompanying letter do not indicate whether the Company is, or is not, under investigation.  The Company has contacted the SEC's staff regarding the subpoena, and the Company is cooperating with the SEC.

Lion and Galena are not related, so why are SEC investigators issuing a subpoena to Lion?

The answer is not entirely clear, but here's what Lion says in its 10-Q:
The subpoena requires the Company to give the SEC, among other materials, all communications between anyone at the Company and certain persons and entities (which include investor-relations firms and persons associated with the investor-relations firms), all documents related to the listed persons and entities, all articles regarding the Company posted on certain equity research or other financial websites, and documents and communications related to individuals who post or have posted articles regarding the Company on equity research or other financial websites.

I have a theory about what's going on, just speculation, no proof, but here goes. Lion Bio is run by CEO Manish Singh. Before joining Lion, Singh was CEO of ImmunoCellular Therapeutics (IMUC), which was a client of The DreamTeam Group. 

The other commonality is Sanford Hillsberg, the chairman of Galena's board and a director on Lion's board. 

On Feb. 12,  TheStreet published a story documenting how  Galena paid an investor relations firm, The DreamTeam Group, to engage in a stock-promotion campaign on behalf of the company. The DreamTeam's work for Galena included publishing promotional articles written under false names on the investor  web site  Seeking Alpha

Aided by this promotional campaign, Galena shares tripled in value from last summer. Coincidence or not, Galena insiders, including CEO Mark Ahn, made millions of dollars by selling company  stock in January.

Galena disclosed an SEC investigation into these activities on March 18.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Adam's Tweets

Select the service that is right for you!

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs