October 7, 2009
Former Biopure Executive Sent to Jail for Lying
The SEC announced that on October 5, 2009 Howard Richman, the former head of regulatory affairs of Biopure Corporation was sentenced to three years incarceration, three years of supervised release, a $50,000 fine, and a $100 mandatory special assessment. Richman, who was a defendant in a previously-filed Commission enforcement action, was indicted on September 24, 2008 by a grand jury convened by the United States Attorney for the District of Massachusetts. He pleaded guilty on March 11, 2009 to lying and obstructing justice in an SEC action against him.
According to the Indictment, from October 26, 2006 through July 17, 2007, Richman represented to a federal judge that he was terminally ill with colon cancer and could not participate in an ongoing civil case that was brought against him by the Commission. The Indictment alleged that in reality, Richman did not have cancer. Rather, according to the Indictment, he falsely claimed to be terminally ill in order to avoid discovery and a scheduled trial in the SEC's case against him and to obtain a favorable settlement. The Indictment alleged that, to perpetuate his lie, Richman provided the Court with false affidavits and fabricated letters from a physician.
Previously, in September 2005, the Commission filed an enforcement action against Biopure, Richman and three other executives alleging 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 in its filings with the Commission.
After Richman's lie was revealed, the Commission reached a settlement of its case with him, and the Court entered a final judgment by consent against Richman on August 6, 2008 permanently enjoining Richman from violating the antifraud and other provisions of the federal securities laws, permanently barring Richman from serving as an officer or director of any public company and ordering him to pay a $150,000 civil penalty. As a condition of his supervised release, Richman must enter into a payment plan with the Commission to pay the remainder of his $150,000 civil penalty. Biopure and three others previously settled SEC charges.
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