Report: Oxford Bioscience Partner Leaves After Securities Trading Breach

8/31/09Follow @wroush

[Updated 8/31/09 6:10 p.m., see below] Jeffrey Barnes, a former general partner with Boston-based Oxford Bioscience Partners, has resigned from the firm, PE Hub‘s Dan Primack first reported today. According to the report, Barnes was asked to leave after the firm discovered that he had engaged in personal trading of securities in Oxford Bioscience portfolio companies without the knowledge of his fellow partners. It is not known which portfolio companies were involved.

[This paragraph and the next added 8/31/09, 6:10 p.m.] An OBP spokeperson responded to Xconomy’s request for confirmation and comment via e-mail. “Jeffrey Barnes has resigned from Oxford Bioscience Partners, effective immediately,” the spokeperson wrote. “The decision was prompted by the discovery of his non-compliance with OBP’s internal policies and procedures concerning personal securities trading. While the situation is regrettable, we do not believe it will have any material impact on the performance of the OBP portfolio or the overall enterprise. We remain committed to working with our portfolio companies and delivering attractive returns for our investors.”

The spokeperson continued: “Jeff’s resignation is a result of Oxford’s recent discovery that Jeff—unknown to his General Partners—violated Oxford agreements and internal policies by personally trading in Oxford Portfolio companies. As [to] concerns [about] replacing him as GP and as board member at portfolio companies, Oxford has six full time investment professionals as well as very active executives in residence dedicated to managing the portfolio. We are in the process of identifying and assigning partners to replace Barnes as a board member for portfolio companies. We are confident that there will be no impact whatsoever to Oxford and its current agreements with investors.”

[Update, Sept. 1, 8:30]: Attempts to reach Barnes have so far been unsuccessful.

Oxford Bioscience is an investor in nearly 100 companies, many in advanced areas of drug discovery, and is unusual among venture firms in that it invests in at least 25 publicly traded companies, including Cambridge, MA-based Critical Therapeutics (NASDAQ: CRTX), San Diego-based Acadia Pharmaceuticals (NASDAQ: ACAD) and Illumina Pharmaceuticals (NASDAQ: ILMN), and Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN)

PE Hub is a unit of Thomson Reuters. In March, Primack reported that Oxford Bioscience Partners was among a group of “walking dead” venture firms, meaning it lacked the capital to invest in new companies. The firm disputed that characterization, and Primack removed it from his list. But he reported that the $150 million that Oxford raised for its fifth fund in 2006 was less than half the amount it had targeted.

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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