Two biotech CEOs indicted in securities fraud schemes

A federal grand jury in the District of Maryland returned an indictment unsealed today charging two men for their roles in schemes to defraud investors in CytoDyn Inc. Inc., a publicly traded biotechnology company (OTCQB: CYDY) headquartered in Vancouver, Washington.

According to court documents, Nadir Bourhassan, 59, of Lake Oswego, Oregon, and Kazem Kazimpur, 69, of Potomac, Maryland, were allegedly involved in a conspiracy to defraud investors through false and misleading claims and material omissions related to CytoDyn’s development of leronlimab, a research drug The monoclonal antibody PRO 140 is also known as a potential treatment for human immunodeficiency virus (HIV). Pourhassan and Kazempour allegedly deceived investors about the schedule and status of CytoDyn’s regulatory submissions to the US Food and Drug Administration (FDA) to artificially inflate and maintain the price of CytoDyn stock and to attract new investors, and for their own personal benefit, including by selling personal shares of CytoDyn stock .

Pourhassan was CytoDyn’s president and CEO at the time of the alleged fraud. Kazempour is the co-founder, president, and CEO of Amarex Clinical Research LLC (Amarex), a private company with offices in Germantown, Maryland, that administered clinical trials for CytoDyn, and was the regulatory agent for CytoDyn in interactions with the FDA. Kazempour also served on CytoDyn’s Disclosure Committee, which was responsible for reviewing and approving CytoDyn’s periodic filings with the US Securities and Exchange Commission.

Said Assistant Attorney General Kenneth A. “These charges also underscore the administration’s commitment, along with our law enforcement partners, to hold corrupt C-Suite executives who abuse their office and engage in securities fraud accountable for their actions.”

“The indictment alleges that these defendants conspired to defraud investors out of pocket,” said US Attorney Eric L. Barron of the District of Maryland. Investors should be able to rely on biotech companies’ statements about their products. Executives who knowingly mislead investors must be held accountable.”

The indictment alleges that Pourhassan and Kazempour provided CytoDyn with and caused materially false and misleading representations about the timelines by which CytoDyn and Amarex would complete and submit CytoDyn’s biologics authorization (BLA) application for leronlimab HIV treatment to the FDA. In April 2020, after CytoDyn and Amarex repeatedly missed their announced timelines, Pourhassan allegedly directed Kazempour and Amarex to file a BLA—even if it was incomplete—so that Pourhassan and CytoDyn could announce to investors that they had filed a BLA. Bourhassan and Kazempour allegedly knew that the FDA would refuse to review an incomplete BLA report.

After Kazempour and Amarex filed an incomplete BLA application at Pourhassan’s direction, Pourhassan and CytoDyn misrepresented in a press release that a “complete” BLA report had been submitted to the FDA when, in fact, it had not. Pourhassan then allegedly sold millions of dollars’ worth of CytoDyn stock based on non-public material information, including information about the fact that the BLA was, in fact and in fact, incomplete when it was presented.

Financial crimes such as securities fraud may not be violent, but they are certainly not victimless. Special Agent in Charge Thomas J. “This indictment sends a message to all seasoned white-collar criminals that no one is beyond the reach of the FBI and our law enforcement partners, and we do not tolerate the rapacious intentions of those in such authoritative positions.”

“The alleged conduct on these charges undermines public confidence in the safety and efficacy of medical products, including medicines,” said Assistant Commissioner Kathryn A. Hirsen of the FDA’s Office of Criminal Investigation (OCI). “The FDA would like to thank our federal law enforcement partners for sending a strong message to biotech executives and others that these types of actions will not be tolerated.”

The indictment also alleges that Pourhassan made, and caused CytoDyn to make, materially false and misleading allegations about CytoDyn’s investigation and development of leronlimab as a potential treatment for COVID-19, including results and significance of clinical trials and the status of CytoDyn’s regulatory reports to the FDA. Pourhassan allegedly knew that, in fact and in fact, clinical studies of leronlimab had failed to produce the results necessary to gain any form of FDA approval for use as a treatment for COVID-19 and the publicly touted results were neither statistically significant nor sound. Scientifically.

“Throughout history, Postal Inspectors have investigated many investment schemes and the one thing that is almost always right is that there are large sums of money to be made, and the scammers are always hiding,” said Inspector-in-Charge Eric Shane of the US Postal Inspection Service. USPIS) Criminal Investigation Group. “In this case, these individuals have seized on the dream of a potential new HIV treatment and preyed on investors, while dashing the hopes of many awaiting treatment. Postal inspectors and their law enforcement partners will work tirelessly to bring to justice those who break regulatory and investment standards, maintaining on a safe and crime-free investment environment for the American public.”

Bourhassan and Kazempour are charged each with one count of conspiracy to commit securities fraud and wire fraud, three counts of securities fraud, and two counts of wire fraud related to the HIV BLA scheme. Pourhassan is separately charged with an additional count of securities fraud, an additional count of wire fraud related to the COVID-19 scheme, and three counts of insider trading. Kazempour is separately charged with making false statements to federal law enforcement agents. Bourhassan will appear in court for the first time later today in Oregon County. Kazempour will appear in court for the first time later today in the District of Columbia. If convicted, Bourhassan and Kazempour each face a maximum sentence of 20 years in prison for both securities fraud and wire fraud, and five years in prison for conspiracy. Kadhimpour also faces a maximum sentence of five years in prison for making false statements. A Federal District Court judge will determine any sentencing after considering US sentencing guidelines and other legal factors.

The FBI Baltimore Field Office, FDA-OCI, and USPIS are investigating the case.

Attorneys Christopher Fenton and Joshua Diebold, Assistant Chief Fraud Officer for the Criminal Division Michael O’Neill, and Assistant US Attorneys Aaron SJ Zelensky and Leo Wise of the District of Maryland are pursuing the case.

If you believe you are a victim in this situation, please contact the Fraud Division’s Victim Witness Unit toll-free at (888) 549-3945 or by email at Victims can find case updates and additional information at:

The indictment is just an allegation. All accused are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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