Richard F. Selden, Former CEO of a Massachusetts Biotechnology Company, Settles SEC Fraud Action
WASHINGTON, July 10, 2008-On July 10, 2008, the Commission announced a final judgment by consent was entered on July 9, 2008 by the United States District Court Judge for the District of Massachusetts against Richard F. Selden of Lincoln Massachusetts. Selden, age 49, was the former CEO of Transkaryotic Therapies (TKT), a biotechnology company that was headquartered in Cambridge, Massachusetts, and was publicly-traded until it was acquired in July 2005.
Selden was the only defendant in a civil injunctive action filed in September 2005, alleging that he made materially misleading statements between October 2000 and October 2002 concerning results of TKT's clinical trials and its U.S. Food and Drug Administration (FDA) application for its flagship drug, Replagal. The Commission's complaint alleged that, during the relevant time period, Selden and, at his direction, TKT, made positive statements concerning Replagal's clinical benefits, describing its clinical trials as a success, and made positive statements about Replagal's chance of being approved by FDA. However, the complaint alleged that Selden knew, but failed to disclose, material negative information, including that Replagal's clinical trial failed to meet its primary objective and FDA had told TKT on several occasions that it was a failed study and had recommended additional clinical trials. The complaint further alleged that Selden benefited by selling 90,000 shares of TKT stock between May 2001 and February 2002, prior to TKT's disclosure of some negative information about Replagal on October 2, 2002, which caused TKT's stock price to fall.
The final judgment against Selden, to which he consented without admitting or denying the Commission's allegations, permanently enjoins him from violating the antifraud and other provisions of the federal securities laws, and orders Selden to pay a $125,000 civil penalty and $1,041,417 in disgorgement and prejudgment interest related to his sales of TKT stock during the period of the alleged fraud. The Court will determine whether a bar from serving as an officer or director of any public company is warranted against Selden at a later date. [SEC v. Richard F. Selden, Civil Action No. 05-11805, USDC, D. Mass.] (LR-20640)
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