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A pharmaceutical company agreed to settle SEC charges of selectively disclosing material, nonpublic information to sell-side research analysts.
According to the SEC, TherapeuticsMD, Inc. ("TherapeuticsMD") made selective disclosures of nonpublic information to sell-side analysts who covered TherapeuticsMD. Two occurrences took place following meetings with the Food and Drug Administration ("FDA") to review the TherapeuticsMD-developed drug TX-004HR. The first occurrence involved a TherapeuticsMD executive communicating with approximately six sell-side analysts following an FDA meeting, and the second occurrence involved TherapeuticsMD executives meeting with sell-side analysts after a meeting with the FDA and a decline in stock of 16 percent. The SEC found that TherapeuticsMD stock moved in a positive direction immediately after both of the meetings with sell-side analysts, going up 19% the day after the first meeting and recovering from 16% down to 6.6% down following the second meeting with sell-side analysts. The SEC also found that at the time of the selective disclosures, TherapeuticsMD did not have policies and procedures regarding compliance with Regulation FD.
To settle the SEC charges, TherapeuticsMD agreed to a pay a civil money penalty of $200,000.
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