When Emergent BioSolutions, the contractor for producing Johnson & Johnson's COVID-19 vaccines, ruined 15 million doses of the vaccine earlier this year, the company's stock value plunged by over 50%. That was bad news for stockholders with the exception of one: the company's CEO Robert G. Kramer, who sold over $10 million of his stock weeks before the debacle.
It's not as though Kramer was selling his stock holdings routinely. The last time was in 2016, as the Post article notes:
"Those 2016 sales by Kramer, along with sales by other Emergent executives around the same time, were the subject of a lawsuit brought by investors who alleged that executives offloaded stocks after making misleading claims about the scale of an upcoming order from the government for an anthrax vaccine. When the order turned out to be smaller than analysts anticipated, the share price fell. Emergent denied the allegations, but the parties later agreed to a settlement in which Emergent paid the investors $6.5 million." (our emphasis)
Emergent has had production quality problems over the past year, which Kramer knew about, including contamination of AstraZeneca COVID-19 vaccines in October 2020 and the corruption of Johnson & Johnson vaccines the following month, which would have had a negative impact on stock prices if known to stockholders and the public.
With this latest revelation, Kramer's problems, along with Emergent's, are just beginning:
"Investors sued Emergent, Kramer and other executives in federal court in Maryland last week, alleging that the firm artificially inflated its stock price by boasting of its ability to make coronavirus vaccines and by failing to disclose problems at the Baltimore site, which is known as Bayview.
At least three other law firms announced this month that they were looking into the company’s handling of the information about production problems."
Who says you can't profit despite your company's blundering? Just ask Robert Kramer.
