Laidlaw and Company were recently smacked with an injunction in US Federal Court to discontinue the distribution of false and misleading materials relevant to the operations of Relmada Therapeutics.
Laidlaw is the primary investment banker for Relmada and as such, that position mandates that Laidlaw adheres to their fiduciary responsibility to it. Both to Relmada and also to Laidlaw clients and stockholders.
The unique circumstances that having this position hold are the ability to control both sides of the financial scene. The misleading information will induce stockholders to rid themselves of their shares which can also induce the panic selling to a feeding frenzy, all of which lead to an inflated commission, increased revenue for Laidlaw and also more profits for its stockholders.
The issue of whether the materials distributed by Laidlaw were in fact misleading, false or in any way harmful to Relmada is only a secondary issue in this lawsuit. Rather, the issue taking precedence should be that of having undue influence.
While fiduciary duties are clear on either side of the issue also clear is the understanding of what this responsibility and duty is, Laidlaw has the added responsibility to protect the interests of its own stockholders.
Mr. Ahern has a history of accusations against him regarding the manipulation of his role as a financial advisor dating back to 2005, all of which have been settled in favor of the client. Mr. Eitner doesn’t have the track record as Ahern; he has been accused of improper transactions in a client account on two occasions, both of which were settled to the benefit of the clients.
A better choice of actions by Eitner, Ahern and Laidlaw would be quietly steering clients away from Relmada if they don’t think it’s a suitable investment for their portfolio. On the other hand, Laidlaw has the common responsibility to not harm or disrupt the business potential of Relmada.
I feel that the intention and spirit of the laws regarding fiduciary responsibility were intended to protect the interests of the public at large and not to be used as a tool to manipulate the price of stocks for personal profit or to the detriment of other business The actual validity of the information disseminated by Laidlaw is for a court to decide, but not for Laidlaw.
I would not want for any company that I did business with to have the enormous control and influence that Laidlaw apparently has over Relmada.