U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21238 / October 6, 2009
Former Executive of Massachusetts Public Company Sentenced to Three Years for Lying and Obstructing Justice in an SEC Action
United States of America v. Howard P. Richman, Criminal Action No. 08-10282-MLW (D. Mass.)
Securities and Exchange Commission v. Biopure Corporation et al., Civil Action No. 05-11853-PBS (D. Mass.)
The Commission announced today that on October 5, 2009 Howard Richman, the former head of regulatory affairs of Biopure Corporation was sentenced to three years incarceration, three years of supervised release, a $50,000 fine, and a $100 mandatory special assessment. Richman, who was a defendant in a previously-filed Commission enforcement action, was indicted on September 24, 2008 by a grand jury convened by the United States Attorney for the District of Massachusetts. He pleaded guilty on March 11, 2009 for among other things lying and obstructing justice in an SEC action against him.
According to the Indictment, from October 26, 2006 through July 17, 2007, Richman represented to a federal judge that he was terminally ill with colon cancer and could not participate in an ongoing civil case that was brought against him by the Commission. The Indictment alleged that in reality, Richman did not have cancer. Rather, according to the Indictment, he falsely claimed to be terminally ill in order to avoid discovery and a scheduled trial in the SEC's case against him and to obtain a favorable settlement. The Indictment alleged that, to perpetuate his lie, Richman provided the Court with false affidavits and fabricated letters from a physician.
Previously, in September 2005, the Commission filed an enforcement action against Biopure, Richman and three other executives alleging that beginning in April 2003, Biopure received negative information from the FDA regarding its efforts to obtain FDA approval of its synthetic blood product Hemopure but failed to disclose the information, or falsely described it as positive developments in its filings with the Commission.
After Richman's lie was revealed, the Commission reached a settlement of its case with him, and the Court entered a final judgment by consent against Richman on August 6, 2008 permanently enjoining Richman from violating the antifraud and other provisions of the federal securities laws, permanently barring Richman from serving as an officer or director of any public company and ordering him to pay a $150,000 civil penalty. As a condition of his supervised release, Richman must enter into a payment plan with the Commission to pay the remainder of his $150,000 civil penalty. Biopure and three others previously settled SEC charges.
For further information, see Litigation Release No. 20947 (March 12, 2009), Litigation Release No. 20744 (September 25, 2008), Litigation Release No. 20672 (August 7, 2008)( SEC Settles Civil Injunctive Action with Former Executive of Massachusetts Public Company), Litigation Release No. 20010 (February 21, 2007)(SEC Settles Civil Injunctive Action Against Former CEO of Biopure Corporation), Litigation Release No. 19825 (September 12, 2006) (SEC Settles Civil Injunctive Action Against Biopure Corporation and Its General Counsel), Litigation Release No. 19651 (April 11, 2006) (SEC Settles with Former Biopure Executive) and Litigation Release No. 19376 (September 14, 2005) (Biopure and Others Charged by the Commission).