Taxpayers are shoveling cash into drug companies developing vaccines, their executives are shoveling that money out into their pockets

Announcements of taxpayer funding drives shares higher, drug company executives cash out while expressing confidence in their companies’ vaccines 

ONE EXAMPLE: Moderna’s CEO made 109 transactions valued at $29.4 million in last four months alone, shoveled $10.4m into his children’s trust fund

Washington, DC – Today, Accountable Pharma released a new report revealing that top executives and directors at five top drug companies receiving billions of taxpayer dollars through Operation Warp Speed have made more than $145 million cashing out their stock options since the launch of Operation Warp Speed on May 15th, 2020. The report is being released following the House Financial Services Committee Subcommittee on Investor Protection, Entrepreneurship and Capital Markets hearing on “Insider Trading and Stock Option Grants: An Examination of Corporate Integrity in the Covid-19 Pandemic.”

“This is an eye-popping amount of money that drug company executives have shamelessly cashed out after pumping up their stock prices with billions of taxpayer dollars,” said Eli Zupnick, spokesman for Accountable Pharma. “While taxpayers are putting more and more skin in the game through Operation Warp Speed, drug company executives are feverishly pulling theirs out and making sure that they come out of this big winners whether or not they actually deliver a safe and effective vaccine.”

Summary of report findings (read the full report here)

According to SEC filings, from the launch of Operation Warp Speed on May 15 through August 31, 2020, executives and directors at five of the companies receiving COVID vaccine funding through Operation Warp Speed made stock transactions valued at a net profit of more than $145 million.

  • The net profit of these transactions was $145.2 million; the total profit of these trades was $177.5 million. See appendix A for additional details.
  • These transactions were made by just 22 individuals, an average profit of more than $6.6 million per individual. See appendix B for additional details.
  • Moderna was the most active trader, making 298 transactions valued at a net profit of $115.5 million.
  • Note that these trades do not account for these executives’ other, traditional compensation sources like salary, bonuses or most stock benefits.
Company Net Profit
Emergent BioSolutions $5,045,987.77
Johnson & Johnson $4,276,630.00
Moderna $115,483,292.92
Novavax $17,334,414.85
Pfizer $3,101,596.05
Total $145,241,921.58


Additional background 

On June 1st, Accountable.US president Kyle Herrig wrote to the Securities and Exchange Commission Market Abuse Unit to alert them about the potential insider trading, saying “this misconduct was particularly egregious because it involved not only financial fraud and manipulation of the financial markets, but also because it exploited widespread fears surrounding the ongoing COVID-19 pandemic.”

CBS: Watchdog urges SEC to investigate vaccine maker Moderna: An anti-corruption watchdog group is urging the U.S. Securities and Exchange Commission to investigate top executives at Moderna, the biotech firm developing a promising coronavirus vaccine, for allegedly manipulating the stock market. “This misconduct was particularly egregious because it involved not only financial fraud and manipulation of the financial markets, but also because it exploited widespread fears surrounding the ongoing COVID-19 pandemic,” wrote Kyle Herrig, who heads Accountable.US, in a letter to the SEC. “I strongly urge the SEC to investigate these matters.”  [CBS, 6/3/20]

Reuters: Exclusive: Novavax executives could get big payday even if vaccine fails: One of the leading U.S. firms developing a coronavirus vaccine, Novavax Inc NVAX.O, has awarded executives stock options that could pay out tens of millions of dollars even if its efforts fail…“Drug companies like Novavax are getting billions of dollars from taxpayers to develop a COVID-19 vaccine, so it’s certainly concerning to see their executives get massive payouts before we know if the vaccine actually works,” said Eli Zupnick, a spokesman for consumer watchdog Patients Over Pharma. [Reuters, 7/22/20]

CBS: Moderna executives hiked their stock sales after announcing positive vaccine trial: Moderna CEO Stéphane Bancel more than tripled the number of his company shares to be sold through an executive stock plan that was changed just days after the biotech in May announced positive early results for its coronavirus vaccine. …the fact that the plans were changed during the pandemic as news was emerging about the company’s closely watched coronavirus vaccine raises new questions about how Moderna executives have pocketed millions of dollars in recent months. “Once again, drug company executives have been caught playing games with their stock options,” Kyle Herrig, who heads the government watchdog group Accountable.US, said in an email to CBS MoneyWatch.The group last month urged the SEC to investigate top executives at Moderna for allegedly manipulating the stock market. “The SEC needs to investigate these stock-plan changes,” Herrig said. [CBS, 7/21/20]

Salon: Pharma execs dumped millions in stock for huge profits after getting pandemic contracts: Pharmaceutical executives continued to dump millions of dollars in stock in August despite criticism that they were profiting from big taxpayer-funded contracts awarded amid the coronavirus pandemic. Stock prices have soared for pharmaceutical companies like Moderna, which is developing a leading vaccine candidate, in no small part thanks to contracts awarded by the Trump administration. The top five executives at Moderna sold more than $89 million in stock in the first five months of the year, with about three times as many stock transactions as in all of 2019, according to Stat News….”It certainly doesn’t inspire much confidence to see drug company executives feverishly dumping their stock options and cashing out fortunes for themselves after stock prices were inflated by the billions of dollars the Trump administration shoveled into drug company coffers,” Eli Zupnick, a spokesman for the progressive watchdog group Accountable Pharma, told Salon. [Salon, 8/27/20]


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