Archive for Thursday, December 3, 2009

Democratic candidate for Kansas governor was part of multimillion-dollar lawsuit that alleged securities fraud

December 3, 2009

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— Thomas Wiggans, who recently returned to Kansas and is running as a Democrat for governor, was part of a $12.75 million settlement in a lawsuit that alleged securities fraud against the company he led.

The lawsuit alleged Connetics Corp., a California pharmaceutical firm, misled investors about the safety of an acne gel the company was developing. Wiggans was chief executive office of Connetics during the disputed period.

Tom Wiggans

Tom Wiggans

The lawsuit also alleged the company issued false financial statements to inflate its worth. The company contended its statements were not false, according to court records, and Wiggans has denied any wrongdoing.

The various lawsuits filed by investors were consolidated and the Oklahoma teachers retirement system was designated as the lead plaintiff. The pension system had purchased stock in the company.

The settlement was signed off in federal court in October in California, just weeks before Wiggans announced his bid for governor.

Wiggans, 57, was raised in Kansas but spent his adult life in the pharmaceutical business in California. He returned to Kansas early this year.

If Wiggans were to win the Democratic Party primary in 2010 he would most likely face U.S. Sen. Sam Brownback, R-Kan., who is leaving the Senate to run for governor.

When asked to comment about the lawsuit and settlement, Brownback’s campaign manager, David Kensinger, said, “He is exactly the kind of person the Democratic Party claims it wants to protect us from — except in Kansas, where the Democratic Party wants to make him governor.”

Amy Jordan Wooden, a spokeswoman for Wiggans, said the settlement of the litigation showed that Wiggans had the kind of problem-solving experience that Kansas needs.

“As a CEO, Tom has had to deal with lots of challenging situations,” she said.

“Anyone who has owned or run a business knows that, unfortunately, legal matters are one of the challenges any business will face from time to time. Tom was able to lead Connetics through this situation, with no findings of wrongdoing, and come out stronger on the other side. It’s proof that he knows how to roll up his sleeves and manage during challenging times.”

The disputed acne gel was called Velac, and during testing of the drug it caused a high rate of cancers in mice, according to court documents.

“The complaint alleges that defendants misled investors about the safety of Velac, and the prospects for FDA approval while knowing that Velac had failed the Mouse Study for nearly a year,” court records said.

Investors also alleged they suffered economic damages after the truth was revealed about misleading statements and actions by Wiggans and other executives that had inflated the company’s worth.

The company had also been under the scrutiny of the U.S. Securities and Exchange Commission. An SEC news release from 2008 shows two co-defendants and executives of Connetics settled with the government on charges of insider trading based on allegations of selling off company stock after receiving insider knowledge that the FDA had problems with Velac because of the cancer concerns.

Comments

just_another_bozo_on_this_bus 5 years, 8 months ago

This guy sounds more and more like a Republican every day.

63BC 5 years, 8 months ago

"As a CEO, Tom has had to deal with lots of challenging situations."

Yup, engaging in massive securities fraud and insider trading will certainly create a challenging situation.

Clearly, this is the man we need in charge of state government.

nbnozzy 5 years, 8 months ago

just_another_bozo_on_this_bus (Anonymous) says…

This guy sounds more and more like a Republican every day

nope, just your typical Democrat.

BigDog 5 years, 8 months ago

Does the Democratic Party not check out the Republicans they recruit? First it was Paul Morrison they recruited .... he had been accused of sexual harassment previously (and was caught in the second case as AG) and in the first case defended by Governor Mark Parkinson. And now the Party recruits Thomas Wiggans who is under investigation for securities fraud.

Maybe they should recruit from within the Democratic Party ... this going after Republicans thing isn't working out real well

Stuart Evans 5 years, 8 months ago

Bozo, have you considered that Democrats are equally as crooked as Republicans? None of them give half a damn about you or your needs. There are two important issues to every politician. Get Elected, Get Re-Elected.

thinkb4utype 5 years, 8 months ago

Seriously?!?!?!? Wiggans experience going through a class action lawsuit and SEC investigation (which may not be finalized) makes him the best choice to be our next governor? Who cares what party he belongs to (or did...)... i want him to go back to California. If any of you still think as Democratic party leaders Anthony Hensley, Larry Gates and Paul Davis do that "he's the one"...you need to read the court docs on this case... especially...

http://securities.stanford.edu/1036/CNCT_01/2008314_r01c_072940.pdf

make sure to read the parts about the confidential informants being asked by him to falsify company earning projections for investors; how he flat out lied to investors time and time again; and how he made more than $4 million selling his shares of Connetics stock during the time he was doing all this lying....

parrothead8 5 years, 8 months ago

As George Washington Cable once wrote, "You'll be careful next time how you cast doubt upon a public official's guilt."

Democrat or Republican, it doesn't matter. It's time to put the lumberjacks from the Nextel commercials in charge.

weeslicket 5 years, 8 months ago

from the article: "Thomas Wiggans, ... ""WAS PART OF"" a $12.75 million settlement in a lawsuit that ""ALLEGED"" securities fraud against the company he led." not much here to get in a stir about....yet. patience, please.

in the meantime: http://securities.stanford.edu/1036/CNCT_01/index.html

Dan Eyler 5 years, 8 months ago

as long as we are going to vote for politicians who lack any common sense this is what we are going to get.
We need common sense middle class people running for congress. But we try to take the easy way out by running a lawyer, the former DA but what we need is more moms and dads who have run a household. Someone who ran a small business and understands what debt and excessive taxes does to a business and job creation. Maybe a mayor of a small town of a few thousand people who worked there way up by taking on those issues that crush the middle class. Someone who takes on corruption in their own party and then becomes governor of their state. Someone who during this time never made more than 156,000 grand a year at best. We need common people in government because the last thing we need is nanny's or a nanny state. We need someone who says get off your butt and work and stop asking others to carry your load.

Flap Doodle 5 years, 8 months ago

Wow, bozo, you're really going all out in your defense of this guy.

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