Richard Pearson's expose, published yesterday on Seeking Alpha, pulls back the curtain on the shady world of paid stock touts. It's an excellent, well-researched story, mostly because of the documentation (emails and electronic signatures) Pearson obtained linking executives at Cytrx (CYTR) and Galena Biopharma (GALE) to the publication of promotional articles under assumed names and without proper financial disclosure.
You really need to read Pearson's story now, if you haven't already. The most damning part, for me, is the evidence showing Cytrx Vice President David Haen and Lauren Terrado, executive assistant to CEO Steven Kriegsman, approving and editing these promotional articles.
Pearson has emails between himself and Tom Meyer, the lead writer and recruiter for The DreamTeam Group, the marketing firm hired by Cytrx and Galena to tout their stocks all over the Internet. These emails also demonstrate quite convincingly that Cytrx and Galena executives knew about the publication of articles under fake names and weren't bothered at all by the lack of financial disclosure -- until they realized the truth was about to come to light.
Pearson submitted a dummy promotional article about Galena in early February. On Feb. 10, Meyer emails Pearson and is told that Galena is "putting a hold on all the GALE articles right now."
In his article, Pearson speculates Galena backed out because the company knew about my story on the stock-touting articles crafted by The DreamTeam Group.
Pearson is correct. I contacted Galena and The DreamTeam Group by email and phone on Feb. 10, seeking comment for the story I published on Feb. 12. Galena executives knew about my story on Feb. 10 and quickly told Meyer to put the kibosh on any new promotional articles.