Litigation Release No. 19376 / September 14, 2005

SECURITIES AND EXCHANGE COMMISSION v. BIOPURE CORPORATION, THOMAS MOORE, HOWARD RICHMAN AND JANE KOBER, (United States District Court for the District of Massachusetts, Civil Action No. 05-11853-WGY)


The Commission today filed a civil fraud action against Biopure Corporation of Cambridge, Massachusetts and three top executives for misleading public statements about the company's efforts to obtain FDA approval for its primary product, a synthetic blood product, while at the same time Biopure was raising millions of dollars from investors. The action, filed in federal district court in Massachusetts, charges Biopure, its former CEO Thomas Moore, 54, of Boston, former Senior Vice President of Regulatory Affairs and Operations Howard Richman, 53, of Houston, Texas, and current General Counsel Jane Kober, 62, of Bellport, New York, with violating or aiding and abetting violations of the antifraud and reporting provisions of the federal securities laws in connection with materially misleading statements between April and December, 2003.

The Commission's Complaint alleges 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. Specifically, the Complaint alleges that in April 2003, the FDA placed a clinical hold barring Biopure from conducting clinical trials of Hemopure in trauma settings such as emergency rooms, because of safety concerns about Hemopure. As alleged, during the next eight months, the company concealed the imposition of the clinical hold while making public statements about its plans to obtain approval for trauma uses of Hemopure. In addition, according to the Complaint, in July 2003 the FDA informed Biopure that it had not approved Biopure's application for use of Hemopure in orthopedic surgery, and instead conveyed serious concerns about whether the materials Biopure had submitted in support of its application were reliable and questioning the safety of Hemopure. Biopure, however, issued public statements beginning on August 1, 2003 describing the FDA's communication as good news, causing its stock price to increase by over 20%. The Complaint alleges that Biopure continued to make misleading statements until December 2003. During this period, Biopure raised over $35 million from investors. The Complaint further alleges that as the true status of Biopure's efforts to obtain FDA approval gradually became public, through a series of incomplete and misleading disclosures between late October and the end of December 2003, the company's stock price plummeted almost 66% from its August 1 price.

According to the Complaint, Moore, the former CEO, personally made and approved misleading statements; Richman, the former officer responsible for FDA relations, made and provided information for misleading statements; and Kober, who continues to serve as Biopure's General Counsel, drafted and approved misleading statements. The Commission's Complaint charges Biopure and the three individual defendants with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and with directly or indirectly violating Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder, and charges Moore with violating Rule 13a-14 thereunder. The Commission is seeking injunctive relief, civil penalties, and an order barring Moore, Richman and Kober from serving as officers or directors of any public company.

*SEC Complaint in this matter