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Vaccine firm hit with second COVID-19-related suit


A shareholders derivative directors and officers liability lawsuit has been filed against a vaccine development company for allegedly issuing false information about a COVID-19 vaccine.

The lawsuit, David Stachowski, derivatively on behalf of Vaxart, Inc. v. Steven J. Boyd et al., which was filed in U.S. District Court in San Francisco on Sept. 17, follows a putative class action lawsuit based on essentially the same allegations that was filed against the company in August.

The latest complaint, which was first reported by the D&O Diary, also states that the terms of stock warrants owned by investor New York-based Armistice Capital Inc. were changed in June to make it easier for the hedge fund, whose officials have two seats on the company’s board, to rapidly acquire 21 million shares.

This occurred shortly before Vaxart announced it was selected to participate in the U.S. Department of Health and Human Services’ effort to create and produce a COVID-19 vaccine, named Operation Warp Speed.

After the company’s stock price rose in response, Armistice made a profit of more than $197 million, the complaint states.

The complaint states also that the company had granted stock options to its CEO, Andre Floroiu, which increased his options’ value to more than $28 million from $4.3 million. Armistice and Mr. Floroiu are among the defendants in the lawsuit.

The complaint states the company’s vaccine is not part of the HHS program, but that its vaccine candidate was included in a trial on primates that a federal agency was organizing in conjunction with the program.

The lawsuit charges the defendants with breach of fiduciary duty, unjust enrichment and violations of the securities law.

A company spokesman did not respond to a request for comment.

More insurance and risk management news on the coronavirus crisis here.






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