Persons, who realize the consequences of litigation, filed in the way of an amended complaint and part of Relmada’s on-going lawsuit against Laidlaw are wise to note that oversights, on the part of the investment banker, may be judgement calls, which need further evaluation.
The following recap, of an article/press release provides the reader with significant details, as to the history between Relmada and Laidlaw. Further, Relmada, within this recap, is accordingly, referred to as the Company.
The link to the press release is: http://www.prnewswire.com/news-releases/relmada-therapeutics-files-amended-complaint-against-laidlaw-and-its-principals-matthew-eitner-and-james-ahern-300209454.html.
Relmada Therapeutics Files Amended Complaint Against Laidlaw and Its Principals, Matthew Eitner and James Ahern:
The press release was supplied to the general public, by Relmada Therapeutics, Inc., at the location of New York, on January 26, 2016. Notable: Relmada, (The Company) is a clinical stage company, with its objective to develop therapies, resulting in the successful treatment of chronic forms of pain. On January 26th , the Company announced that it had filed a legal motion in order to amend its Complaint against Laidlaw & Company (UK) Ltd.). The Amended Complaint was filed within the United States District Court of Nevada. The Motion to File an Amended Complaint is part of its lawsuit, which it filed prior. The amended documentation is inclusive of an additional claim which is based on the institutional banker’s Breach of fiduciary duty, owed to Relmada. Laidlaw disclosed information of a confidential nature, which it acquired in its position as Relmada’s investment banking organization. The company, is also wishing to acquire monetary damages, which have arisen from the costs involved, in the way of responding to the misleading proxy materials, produced by the investment banking organization in December of 2015.
The Company, too, made it clear that the court, on a prior occasion, issued a restraining order and injunction, against the investment banking organization and its officials Matthew Eitner and James Ahern. The principals of Laidlaw had dispersed proxy materials of a false and misleading nature. It is the belief of the Relmada Board of Directors that the investment banking organization must provide it with compensation for the damages, suffered, due to the investment banking organization’s negligence. It is also, believed by the Board, that the investment banking institution must be prevented from bringing harm, financially, to other corporations.
The press release makes note of a piece of correspondence, which was composed by Relmada, addressing its shareholders. The litigation against the investment banking organization is mentioned, in a conspicuous manner, within this letter. The date of the shareholder correspondence is: January 26, 2016.
The letter mentioned that the Company remained dedicated to pursuing Laidlaw, in the form of a lawsuit. It mentions that it filed a Motion to Amend its Complaint Against Laidlaw & Company (UK) Ltd. (“Laidlaw) within the lawsuit that it had filed, on a previous occasion, in the Federal District Court located in Nevada. The Amended Complaint is inclusive of an added legal claim. It is based on the investment banker’s breach as to owing a fiduciary responsibility to the therapeutic company. This fiduciary responsibility was breached when the investment banking organization, took it upon itself, to disclose information, of a confidential nature, which was acquired in its position as the Company’s investment banking organization.
The Company, made it clear, to its members, that it was also seeking monetary damages, which arose from fees incurred, in response to the investment banker’s misleading press release, dated December 2015. The Nevada court, on a prior occasion, issued a temporary restraining order and injunction against the investment banker and two of its officials—Matthew Eitner and James Ahern. The restraining order and injunction resulted from the two officials dispersing misleading proxy materials. The Board of the Company, firmly believes, that the investment banking organization, owes it compensation, for damages which were suffered, resulting from its negligent behavior. It, further, believes that Laidlaw must not be allowed to bring harm to other corporations.
The letter stated that it was positive about the future and that, by way of the lawsuit, it looked forward to addressing the unfortunate financial harm which Laidlaw has caused it. The Company’s objective is to take its time and talent in way of continuing its development of its products.
The historic relationship between Laidlaw and Relmada:
Laidlaw began its relationship with the Company, with regard to the Company’s offerings of December 2011 and May 2014. Laidlaw became the financial advisor of Relmada. It was the investment banking organization that provided merger and acquisitions services with regard to the merger of Camp Nine, Inc., and the Company. The merger resulted in way of Relmada becoming a public company.
The Company, during the springtime of 2015, discussed with its investment banker, the idea of attracting to it new money. Laidlaw, in response, put together a road show in April 2015. The banking institution, as a result, introduced investors to the therapeutic organization. Within the summer of 2015, Relmada expressed to Laidlaw that it was not happy with the investment banker’s performance, in way of organizing the Road Show or in its attraction as to “new money.”
Laidlaw, on the 21st of October, sent correspondence to Relmada’s Board; and filed a Schedule 13D with the SEC, disclosing information of a confidential nature, concerning capital raising; and relationships with other institutional investors.
The Company was not happy with the preceding actions. The Board of Directors set up a meeting for December 1st 2015 between Relmada and Laidlaw, in order to see if costly litigation could be avoided, by way of an amenable type of settlement.
The meeting was attended by the Company’s CEO and two independent directors which had been newly appointed, as well as Eitner and Ahern, representing Laidlaw. Ben Snedeker was also in attendance, acting as a hired consultant, representing the interests of the investment banking organization.
During the course of the meeting, the two company principals of Laidlaw, Ahern and Eitner, requested that they be provided with the authority to appoint a majority of the members to the Board of the Company.
On December 4th 2015, Laidlaw issued a press release, making the announcement that it was launching a proxy contest. It also made mention of a consent, in way of soliciting the election of 5 Directors, in order to take control of Relmada.
The Board of the Company, viewed the press release, as a violation of federal security regulations. It brought legal action against Laidlaw, promptly, within the Federal District Court located in Nevada. It wished to halt Ahern and Eitner from further dispersement of false proxy materials. It also sought to require the investment banker to retract its false information, which was provided in a press release.
The federal district court, on December 10, 2015, provided issuance of a temporary restraining order and injunction, in order to instruct the Laidlaw officials from halting the continual delivery of false proxy materials.
During a Hearing of Merits, held on December 22, 2015, the federal district court upheld the restraining order and granted the Company’s demand of issuance of an injunction which instructed Laidlaw from continuation of dispersing false and misleading proxy materials.
The most significant point is that Laidlaw’s performance, according to Relmada, has harmed the Company, financially:
According to the company, it has racked up considerable expense, in being exposed to unnecessary distractions. The Company’s NASDAQ listing was unfavorably affected, by the actions of the investment banking organization. The stock price of the Company, once the investment banking organization filed the Schedule 13D, fell, excessively. The stock was trading at $4.03 per share, and plummeted to $1.65, per share. This drop occurred, too, when the company was making significant and successful in-roads, as to product development.
The Company claims it has uncovered information that Laidlaw has a long history in the form of violating state and federal security laws and financial regulations:
Examples include the following:
Laidlaw received more than sixty consumer complaints and damage claims between 2007 and 2009. The investment banking organization, too, was sanctioned by the FINRA for inadequate reporting of such complaints.
Laidlaw entered into a Letter of Acceptance with the FINRA, when the FINRA established that the investment banking organization failed to put together policies and procedures, relative to compliance with rules and regulations, concerning activities associative to anti-money laundering. The FINRA, further, found that policies and procedures had not been put into place, involving retention of emails and other highly critical forms of financial reporting.
The bottom-line is that Laidlaw has a long-standing tenure of non-compliance, as it applies to security laws and in its hiring of compliance officers and brokers.
The Investment banker has hired many individuals that had previously been fined with respect to FINRA violations or who originated from Rogue Brokerage Houses. A story entitled: “More than 5,000 Stockbrokers from Expelled Firms Still Selling Securities”, and published in October of 2013, within The Wall Street Journal (“WSJ”) made notation that the investment banker had made acquisition of a branch location and had acquired, at minimum, sixteen brokers, originating from brokerage firms which had been closed by the FINRA.
Notes regarding: Relmada Therapeutics, Inc.:
The Company is a publicly traded clinical-stage pharmaceutical organization. Its aim is to develop pharmaceuticals which have been proven dependable along with that of new medicines, which may, potentially, address the requirements of ridding clients of chronic pain. The company has a diversified product portfolio containing four primary products, within various development stages.
Notes with Regard to Laidlaw and its Principals:
Laidlaw is a leading investment boutique banker with one-hundred seventy years of experience. It is dedicated to providing advice to international and domestic clients.
Matthew Eitner is the CEO of Laidlaw & Company (UK) Ltd. He joined Laidlaw in 2010. He began his position of CEO in April 2011. Mr. Eiitner has served as Managing Director of AEGIS and devotes his time in advocating community charities; as well as in the participation of those charities.
James Ahern is the Managing Partner and Head of Capital Markets of the Investment Banking Organization. Mr. Ahern joined the organization in October, 2010. He places his focus in way of arranging financing for private and public companies.
Further information regarding Laidlaw is attainable by accessing the following site: