Alexion: Are Hallal And Sinha Ducking Sarbanes?
ALXN’s former CEO, David Hallal, and CFO, Vikas Sinha, left the company amid fraud allegations.
ALXN hired a new CEO and CFO, but the September 10Q still has not been filed.
The question remains: Who will certify the financial statements are accurate?
It appears that Hallal and Sinha are either ducking Sarbanes or hiding something.
Assume the worst of ALXN, and sell the stock.
Alexion Pharmaceuticals (NASDAQ:ALXN) has been reeling from allegations of fraudulent sales practices by a former employee. On Monday CEO David Hallal resigned for personal reasons and CFO Vikas Sinha left to pursue other opportunities. The company’s 10-Q for the quarter ended September could be delayed until January. ALXN plunged 17% in two days.
Alexion implied the executives departed due to the company having lost confidence in them. However, I believe investors should assume the worst. The departures of Hallal and Sinha might be a veiled attempt by them to duck Sarbanes-Oxley.
Alexion was quick to point out that its internal audit committee “has not identified any facts” requiring it to “update its previously reported historical results.” The statement actually drove speculation as to what unknown risks remained — including fraud. The company also replaced Hallal with David Brennan, former CEO of drugmaker AstraZeneca (AZN, OTCPK:AZNCF, OTC:AZNDF) and an Alexion board member since 2014. Sinha was replaced as CFO by David Anderson, a former CFO at Honeywell (NYSE:HON). Anderson stated that his main priority was to complete the requirements to be able to file the 10-Q as soon as possible; his goal is to have it completed by January.