Cybertronics charged under SEC laws

The recent news about Dr. Nemeroff stepping down from his position as editor of the American College of Neuropsychopharmacology journal called Neuropsychopharmacology for not disclosing a conflict of interest with Cybertronics. Dr. Nemeroff is chairman of Cyberonics' Mechanism of Action Advisory Board.

This comes on the heals a complaint filed with the United States Securities Exchange ommission against Cybertronics on August 18, 2006, for violation of the United States securities laws under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by:

making false and misleading statements regarding Cyberonics' Vagus
Nerve Stimulation Therapy System (the "VNS Device") as a therapy for
treatment-resistant depression ("TRD").

From the First Amended application with the United States District court in Texas Lead plaintiffs allege that the defendants failed to disclose that certain individuals associated with the U.S. Food and Drug Administration ("FDA") had safety and efficacy concerns about the use of the VNS Device for the treatment of depression and questioned the adequacy of evidence of safety and effectiveness presented to the FDA by the Company, that the defendants misrepresented the prospect for payer reimbursement for the VNS Device, that the defendants concealed executive compensation and governance issues, and that the defendants falsely stated that an analyst's statements about options granted in June 2004 were inaccurate and without merit.

Lead plaintiffs seek to represent a class of all persons and entities, except those named as defendants, who purchased or otherwise acquired Company securities during the period February 5, 2004 through August 1, 2006.

The amended complaint seeks unspecified monetary damages and equitable or injunctive relief, if available.

Cybertronics's annual report is pending a review of stock option grants and accounting issues so it's stocks have taken a hit. See Yahoo Biz and Yahoo Finance

The MediaScan of StockHouse USA, an internet exchange pitt stop to empower investors provided links to the above financial reports.

I wouldn't expect the Ontario Securities Commission to get on the band wagon with the SEC. Beside Cybertronics being hyped by the IEEE - the Institute of Electrical and Electronics Engineers in their Spectrum magazine with an article called 'Psychiatry's shocking new tools', the Centre for Addiction and Mental Health "Canada's leading addiction and mental health teaching hospital" and "is fully affiliated with the University of Toronto", has been funded by Cybertronics as it appears in this list from their website along with quite a few large pharmaceutical companies such as:

AstraZeneca Canada Inc.
Aventis Pharmaceuticals Inc.
Eli Lilly Canada Inc.
GlaxoSmithKline Inc.
Merck Frosst Canada Inc.
Pfizer Canada Inc.
Purdue Pharma

And Government Ministries:

Citizenship and Immigration Canada (Joe Volpe being a former Minister of and recipient of donations from Apotex - a generic pharmaceutical company in Toronto),

Ontario Ministry of Community and Social Services
Ontario Ministry of Correctional Services
Ontario Ministry of Health and Long-Term Care

And of course, the University of Toronto, who has been cited in this article on questionable research ethics.