Updated from 6:07 am EDT with additional Galena comment.
Lake Oswego, Oreg. (TheStreet) -- Galena Biopharma (GALE) CEO Mark Ahn was fired by the board of directors at a special meeting held Monday, according to a source close to the company.
Ahn's forced exit from the troubled Galena follows an internal investigation by the board which scrutinized the company's hiring of an investor relations firm to engage in a stock-promotions campaign. This investor relations firm, The DreamTeam Group, used false names to write and publish misleading and promotional articles about Galena on DIY investor web sites like Seeking Alpha.
After Galena's stock price rose due to the promotional campaign, Ahn and other insiders made millions of dollars by selling company stock.
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The Securities and Exchange Commission is also investigating Galena's role in the stock promotions scheme.
Galena tried to soften the blow of Ahn's firing in an announcement Thursday, claiming he resigned "to pursue other long held personal and professional goals." Galena Chief Operating Officer Mark Schwartz was named CEO to replace Ahn.
Last February, Ahn responded to my reporting on the DreamTeam stock promotion scandal by issuing a letter to shareholders in which he accused me of having an "agenda when it comes to Galena" and said my reporting on the company was "tabloid-like" and "largely devoid of true information."
But less than a month later, Galena disclosed that the SEC was investigating the matter, and the company's board began its own, internal inquiry into the hiring of the DreamTeam investor relations firm. That internal investigation was completed in July, the company disclosed recently, but without detailing conclusions reached or what corrective steps were taken.
In addition to the SEC investigation, five lawsuits have been filed against Galena in federal and state court, accusing the company of violating federal securities laws and breaching fiduciary duties. All the lawsuits pertain to Galena's involvement in the stock-promotion campaign and the insider stock sales.
Galena's stock price has been cut in half since the DreamTeam story was published. Shares closed Wednesday night at $2.32.