Elan paid $250,000 to former director over SEC referral
Company referred publicly to Jack Schuler as a ‘disgruntled director’
Elan has not confirmed the payment. Photograph: Bryan O’Brien
Elan is reported to have paid more than $250,000 dollars to a former director after its board reported him to the Securities and Exchange Commission (SEC) over alleged insider trading. The SEC closed the file after an inquiry.
Last week, the company referred publicly to Jack Schuler as a “disgruntled director” who had left the board after Elan was “forced to issue proceedings against him in 2011 which raised serious issues concerning his conduct”.
That referred to a High Court injunction – subsequently dropped by agreement – in which an affidavit noted the firm had reported Mr Schuler to the SEC over potential insider trading allegations.
The statement followed publication in the Financial Times last week of a letter by Mr Schuler, in which he said several transactions Elan wants shareholders to approve at an egm today were “not in the best interests of Elan or its shareholders”.
Elan said last week it had “no direct knowledge” of the outcome of the inquiry by the SEC.
But a letter seen by The Irish Times and addressed to, among others, Elan company secretary Liam Daniel and Liam Kennedy at the company’s Irish law firm, confirms that the SEC had completed its investigation.
Mr Schuler’s lawyer, Michael Gordon, issued a “demand for indemnification” for $250,000 in legal fees incurred by Mr Schuler, plus $3,240.30 in “out of pocket expenses”. Mr Gordon says that money has been paid. An Elan spokesman was unable to clarify why it would deny knowledge of the outcome of the proceedings when it had been told of no wrongdoing. Elan has not confirmed the payment.