Shareholders file fraud suit against Medco official.Shareholders file fraud suit against Medco official Complaint alleges company helped insider stock sale An officer of Medco Research Inc., a Los Angeles-based medical research firm, intentionally painted a false rosy picture of the company's future, hinted of a company buyout, and then sold his own stock before bad news came out, two shareholders alleged in a suit filed May 3 in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Superior Court. The officer, William Govier, Medco director of research and medical affairs and executive vice president, was terminated last week, Medco announced. The company is a developer of medical drugs, which are licensed to major drug companies for manufacture and sale, after federal government go-aheads for use are obtained. The company's stock is listed on the NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on , the over-the-counter market over-the-counter market Trading in stocks and bonds that does not take place on stock exchanges. Such trading occurs most often in the U.S., where requirements for listing stocks on the exchanges are strict. , under the symbol MEDR MEDR Medical Returnee MEDR Maximum Euclidean Distance with Respect to Rank , and traded last week in the $12-share-range. There are about 8.8 million shares outstanding, giving Medco a market value of about $105 million. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the suit, in November of last year Medco made several positive announcements about drugs it had under development for heart patients, and also announced it had hired the Los Angeles offices of Oppenheimer & Co. Investment banker Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. Oppenheimer was hired to "explore and advise Medco as to the potential strategic corporate alternatives that may be available for the company to maximize shareholder value," according to a Medco press release dated Nov. 21, shareholders Evelyn Wolf and Leon Sutton allege To state, recite, assert, or charge the existence of particular facts in a Pleading or an indictment; to make an allegation. allege v. . The pair have hired attorney Shinaan Krokowsky of the Century City law firm of McCambridge, Deixler, Marmaro & Goldberg to litigate their case. On Jan. 12, at a Medco annual meeting, it was announced that the Medco board of directors would meet with Oppenheimer to hear the investment banker's recommendations on how best to maximize shareholder value. At the annual meeting, Oppenheimer officials "strongly suggested" they would recommend to the board that Medco be sold to a major drug manufacturer, the suit alleges. But Oppenheimer could find no buyer for Medco, the shareholders allege. Three major pharmaceutical acquirers were talked about, according to the suit: Squibb, Mallinckrodt and Fujisawa. From March 12 to March 27, Medco executive Govier began selling stock in Medco, aware that no deal was pending, the shareholder suit claims. Govier sold about 43,000 shares of Medco, at a price around $19.50 a share, the suit adds. On April 9 Medco issued a press release revealing to the public that no buyers had emerged, and Medco stock weakened substantially. The shareholder suit alleges that Medco announcements aided and abetted Govier in his scheme to sell stock on inside information. Before joining Medco in 1987, Govier was director of pharmaceutical research and development at Du Pont Du Pont (d  pŏnt), family notable in U.S. industrial history. The Du Pont family's importance began when Eleuthère Irénée Du Pont established a gunpowder mill on the Co. He could not be reached for comment.
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