David Johnston

Quick summary on David Johnston

David Johnston‘s career has been marred by significant legal and ethical issues, particularly during his time as CFO at AVEO Pharmaceuticals.

Securities Fraud Conviction: Johnston was convicted of securities fraud for misleading investors about the status of AVEO’s experimental drug, Tivozanib. His failure to disclose critical concerns raised by the FDA about the drug’s efficacy led to substantial financial losses for investors.

Resignation Amid Legal Troubles: Johnston resigned from ImmunoGen, Inc. following his conviction, yet continued to receive compensation as a paid consultant. This raised questions about corporate governance and accountability, especially considering the severity of his legal issues.

SEC Lawsuit and Settlement: The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Johnston and other executives from AVEO, accusing them of misleading investors. Although AVEO settled for $4 million, the company did not admit wrongdoing, leaving lingering doubts about its practices.

Post-Conviction Consulting: After his conviction, Johnston started DBJ Consulting LLC, offering CFO services to biotech firms. However, many in the industry view this move with skepticism, given his legal history.

Impact on the Biotechnology Sector: Johnston’s actions have cast a shadow over the biotechnology sector, undermining investor confidence and leading to heightened regulatory scrutiny regarding corporate transparency and ethical standards.