SEC Charges Former Biotechnology Company CEO for Misleading Investors
June 30, 2020
File No. 3-19843
June 30, 2020 - The Securities and Exchange Commission today announced that Michelle Dipp, a co-founder and former CEO of the now defunct OvaScience, Inc., agreed to settle fraud charges for misleading investors about the availability and commercial prospects for the company’s fertility treatments that were in development.
According to the SEC’s Order, from late 2014 through 2015, Dipp made materially false and misleading statements about the company’s flagship product, AUGMENT, which was supposed to enhance in vitro fertilization. The order finds that, despite having information to the contrary, Dipp falsely stated that AUGMENT was available in the United Kingdom and that clinics in other countries were transitioning to providing commercial AUGMENT treatments. The order also finds that Dipp falsely claimed the company was on track to meet its goal of performing 1,000 commercial AUGMENT treatments in 2015, when just a few treatments had been done and there was little demand for treatment. According to the order, Dipp also misstated in 2016 that the company had commenced offering another treatment, OvaPrime.
The SEC’s order finds that Dipp violated the antifraud provisions of Sections 17(a)(2) and (3) of the Securities Act and caused OvaScience to file with the Commission annual, quarterly, and current reports containing materially false and misleading statements. Without admitting or denying the SEC’s findings, Dipp agreed to a cease-and-desist order and to pay disgorgement of $36,000, prejudgment interest of $8,360 and a civil money penalty of $75,000.
The SEC’s investigation was conducted by Helaine Schwartz and supervised by Lisa Deitch, Stephan Schlegelmilch, and Melissa Hodgman of the Division of Enforcement’s Home Office.