|SFBC exec's background questionedGerald ''Jerry'' Seifer, |
SFBC's vice president of legal affairs, has been fined in the past by the Federal Trade Commission and the Commodities Futures Trading Commission.
BY JOHN DORSCHNER
An executive with SFBC International -- the besieged Miami drug-testing company -- has a history of problems with federal regulators, it was revealed during a corporate conference call Thursday.
Gerald ''Jerry'' Seifer, the firm's vice president of legal affairs, has been fined in the past by the Federal Trade Commission and the Commodities Futures Trading Commission.
Seifer has close relationships with others at SFBC. In April, public records indicate, Seifer and SFBC Chairman Lisa Krinsky made one of the most expensive residential purchases in Broward County history, spending $15 million for a home on Hillsboro Mile. They also are listed as joint registrants of a 2005 Rolls Royce.
A cousin, David Seifer, is listed as an outside counsel for the firm, and the lawyer listed as the registered agent for SFBC, Michael D. Harris, also incorporated one of Seifer's companies that later ran into trouble with the FTC.
Daniel Loeb, chief executive of Third Point LLC, a New York investment firm, dubbed Seifer ''possibly some sort of rogue employee,'' during a conference call that SFBC executives held with analysts Thursday morning.
Chief Executive Arnold Hantman responded: ``We were aware of Mr. Seifer's background. . . . It happened many years ago. . . . He has been a very valuable and loyal employee.''
Hantman said Seifer has worked for the company for 10 years, and though he is listed as the legal affairs executive, he's not a lawyer. Hantman didn't respond to questions about the nature of Seifer's and Krinsky's relationship, and the two didn't respond to Herald phone calls for comment.
SFBC has been under intense scrutiny lately. A 28-page special report in Bloomberg Markets magazine entitled ''Pharma's Shameful Secret'' caused the company's stock to fall more than 20 percent, and its headquarters and main testing facility, a former Holiday Inn on Biscayne Boulevard, was declared unsafe. County building inspectors recently allowed the unsafe signs to be removed, but a hearing on the safety of the structure is scheduled for next month.
Seifer's name became the focus of attention Thursday because he was chastised in a report written by two independent counsels for the company hired to respond to stories by Bloomberg reporters.
The counsels' termed Seifer's behavior ''inappropriate'' for threatening four SFBC test subjects who had talked to Bloomberg. Two of the immigrants were in the country illegally, according to the report, and Seifer mentioned the possibility of them being deported unless they signed documents disputing the Bloomberg article.
During the conference call, CEO Hantman said the report, prepared by Tew Cardenas and Winston & Strawn law firms, was a ''clear and definitive vindication'' of the company, but during the question-and-answer period, several participants questioned the role of Seifer. One asked why he hadn't been fired.
Hantman said Seifer had been ''counseled and suspended with pay for 30 days,'' but ''for 10 years, he has been a very valuable and loyal employee'' who overreacted during a heated discussion about test subjects admitting they had lied to SFBC to get enrolled in studies.
Records of the National Futures Association indicate Seifer was fined $15,000 in 1979 for commodities trading issues, but the NFA's website doesn't offer specifics. A 1991 story in Communications Daily said he was subject to a CFTC cease and desist order.
SEIFER IN THE 1990s
In the early 1990s, Seifer became involved in telemarketing application services for persons seeking wireless cable licenses.
In late 1992, Seifer, partner Anthony Liggio and their company, Applied Telemedia Engineering and Management, reached a settlement with the FTC concerning ``charges of misrepresenting that consumers were highly likely to win a valuable license enabling them to own and operate a wireless cable television system.''
The FTC news release states the company and Seifer agreed to pay $100,000 ''to provide consumer redress,'' but on Thursday, SFBC spokesman Michael York said Seifer had told him that the payment was later waived.
During the conference call Thursday, one analyst complained of the ''disturbing surprises'' that kept popping up about SFBC.
Executives said they were also cutting expected earnings for 2005, to $1.56 to $1.61, down from an earlier forecast of $1.66 to $1.72. They said a drop of three cents per share was caused by legal and other expenses in responding to the Bloomberg articles and another two cents per share was attributed to a pharmaceutical firm that canceled contracts due to the articles.
Meanwhile, a Bloomberg spokeswoman, Judith Czelusniak, said the news organization stood by its story.
On Thursday, SFBC stock dropped 10.6 percent to $15.78, with a trading volume 10 times higher than normal.
They are really upset with this Loeb fellow over at the yahoo message board.