On Verge of Omeros IPO, Former Finance Chief Accuses Company of Filing False Records with NIH

10/2/09Follow @xconomy

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his dismissal was “for reasons other than this incident.” The company said in its disclosure to investors that it plans to defend itself, even though the lawsuit “may consume our time and resources.”

Klein, a former chief financial officer of Bothell, WA-based Sonus Pharmaceuticals and director of finance at ATL Ultrasound, has included other charges in his complaint. He accuses Omeros of making “false statements” in its IPO prospectus to investors, which “omits critical facts” about his whistleblower report to the company audit committee, and about the audit committee’s findings.

The audit committee and outside legal investigators informed Klein that his original report about false time-keeping practices was accurate, according to his legal complaint. Yet he says Omeros gave a “misleading” account of his complaint in its prospectus. Omeros summed up the dispute in its prospectus by saying Klein reported to the audit committee that “the company had submitted grant reimbursement claims to the NIH for work the company had not performed.”

Klein challenged that assertion in his complaint: “This is a false statement and omits critical facts which imply that Klein’s report to the Audit committee was unsubstantiated and false,” Klein said in the complaint.

Omeros, in its response, denies that any of the statements in its IPO prospectus are false or misleading.

One of the important facts that Klein says the company omitted from its prospectus is that David Mann, the former chief financial officer of Seattle-based Immunex, resigned from the Omeros audit committee in March, after Klein’s whistleblower report and termination. The company, in its response, also says that Mann resigned in March, but that his departure is not relevant to the allegations raised by Klein’s lawsuit.

In other parts of his complaint, Klein describes escalating tension between Demopulos and himself throughout the fall of 2008, before the whistleblower report … Next Page »

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