Robert Kramer, the former CEO of Emergent BioSolutions, is facing a lawsuit from the New York Attorney General over allegations of insider trading. The suit claims that Kramer sold off company stocks while in possession of confidential information about unresolved contamination issues at Emergent.
“Kramer entered into the illegal trades while in possession of material nonpublic information regarding serious and unresolved contamination issues Emergent faced,” according to the complaint. The lawsuit alleges that Kramer earned more than $10.1 million through these stock trades. The legal action was filed with the Supreme Court of the State of New York.
The lawsuit centers on agreements made in mid-2020 between Emergent and AstraZeneca, valued at over $260 million. Under these deals, Emergent agreed to manufacture AstraZeneca’s COVID-19 vaccine and provide other contract development services such as analytical testing and drug substance processing.
After these agreements were established, Emergent experienced manufacturing problems, specifically contamination in batches of AstraZeneca’s vaccine. According to the complaint, several batches showed “excess bioburden (bacteria) and elevated endotoxin” levels, which led to their rejection and destruction.
The suit claims that Kramer was aware of these issues by October 6, 2020. Later that month, he allegedly instructed his investment adviser to set up a trading plan. On November 13, 2020—while an internal investigation into the contamination was ongoing and before any public disclosure—Kramer executed this plan. He had not conducted similar trades since 2016.
Kramer continued with additional trades through January and early February 2021 by buying and immediately selling shares in Emergent. Not long after, news about Emergent’s contamination issues became public knowledge, resulting in a drop in share prices “from which it has not recovered,” as stated in the lawsuit. Kramer retired from his position at Emergent in June 2023.
The Attorney General's office is seeking for Kramer to return all proceeds from the alleged insider trading scheme as well as pay related damages.
A separate case against Emergent itself has also been settled; the company agreed to pay $900,000 and strengthen its anti-insider trading policies.
