I recently read that Laidlaw & Company (UK) Ltd., a global investment brokerage firm, has run afoul of U.S. financial regulations once again. In December of last year, the U.S. District Court for the District of Nevada granted an injunction and issued a temporary restraining order prohibiting Laidlaw & Co. and its principals, Matthew Eitner and James Ahern, from “continuing to disseminate false and misleading proxy materials.” It appears from the record that Laidlaw is a partial stakeholder in Relmada Therapeutics, Inc. and was attempting to gain effective control (often referred to as a hostile takeover) by disseminating materially false information to stockholders and proxy voters. Sergio Traversa, Chief Executive Officer of Relmada, believes that Laidlaw’s interests are very different from those of the other Relmada stockholders, and he has vowed to continue taking the necessary actions to protect the Company and its interests.
That makes me wonder, why would an investment firm want or need effective control over a pharmaceutical company? For those that don’t know, Relmada Therapeutics is in the pain pill business (think Methadone). Is Laidlaw trying to corner the market on prescription drug users? Not likely, but for an investment company with holdings in everything from insurance, to biotech, to mining, an investment in pain pharmaceuticals is probably a good investment. Still, why would Laidlaw, particularly its principals Matthew Eitner and James Ahern, want decision making authority over the company?
The logical answer is that Laidlaw believes it can make money. Laidlaw must see something in Relmada that makes them think that, if they can win enough votes to get Relmada uplisted on the NASDAQ, or some similar scheme, perhaps a larger biotech company or a larger investment firm will come along and offer Eitner and Ahern a fortune for their controlling share. Laidlaw makes money, a legitimate pharmaceutical business gets tossed around like a pinball, and who really wins? I’ll tell you who doesn’t win, the guy who needs his Methadone.