SEC Charges Kiromic BioPharma & Former Execs for Misleading Investors About FDA Roadblocks

In a dramatic enforcement move, the Securities and Exchange Commission (SEC) has taken aim at Kiromic BioPharma, Inc., a Houston-based biotech firm, and two of its former top executives, accusing them of keeping investors in the dark about critical FDA setbacks during a $40 million public offering. While the executives face penalties, the company itself avoided a fine, thanks to its efforts to come clean, cooperate, and make things right after the fact.

Back in July 2021, Kiromic was riding high, raising $40 million to fund clinical trials for two promising cancer-fighting drug candidates, ALEXIS-PRO-1 and ALEXIS-ISO-1. But behind the scenes, trouble was brewing. Just two weeks before the big fundraising push, the FDA put both drugs on clinical hold—essentially hitting the brakes on their proposed trials.

Here’s the kicker: instead of being upfront, Kiromic stayed quiet. In SEC filings, investor calls, and roadshow presentations, the company only mentioned the hypothetical risks of a clinical hold, glossing over the very real ones it was already dealing with.

Executives in the Hot Seat

The SEC’s charges zero in on two individuals:

• Maurizio Chiriva-Internati, the former CEO, knew about the FDA holds in mid-June 2021 but didn’t disclose them. Worse, the SEC says he actively participated in roadshow presentations just days before the public offering, failing to correct misleading claims about the FDA review process. Chiriva has agreed to pay a $125,000 penalty and will be barred from serving as an officer or director of a public company for three years.
• Tony Tontat, the former CFO, was no innocent bystander either. After the public offering, he reviewed detailed FDA letters explaining why the agency had issued the holds. Even then, he signed off on an August 2021 SEC filing that kept investors in the dark. He’ll pay a $20,000 penalty and faces a cease-and-desist order to prevent future violations.

Here’s where things take a turn: Kiromic wasn’t hit with a fine. Why? Because when the dust settled, the company stepped up. It voluntarily reported its disclosure failures to the SEC, rolled out reforms, and cooperated fully with investigators.

Eric Werner, who heads the SEC’s Fort Worth Regional Office, summed it up: “These resolutions strike the right balance—holding Kiromic’s former senior officers accountable while crediting the company for its self-reporting and proactive remediation.”

What This Means for Biotech & Beyond

This case is more than just a cautionary tale for Kiromic. It’s a wake-up call for any company navigating the tricky waters of public offerings and regulatory hurdles. Transparency isn’t just a buzzword; it’s a legal requirement. And when it’s ignored, there are consequences—not just for companies but for the people calling the shots.

Even in industries like biotech, where breakthroughs can feel like a beacon of hope, the devil is often in the details. As for Kiromic, while it dodged a financial bullet, the reputational fallout is likely far from over.

In a world where biotech innovation is both high-stakes and high-reward, this case underscores one simple truth: honesty isn’t optional. Investors deserve the full picture, warts and all.

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