Usana executives aren’t the only ones lying about their credentials

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See! Usana Health Sciences (NASDAQ: USNA) CFO Gill Fuller was right when he said that everyone was lying about their credentials (including him!).

The CEO of CellCyte (Public, OTC:CCYG) was recently busted for embellishing his resume, and the stockholders have paid dearly. Gary Reys, the co-founder and CEO of CellCyte Genetics was busted by The Seattle Times, who challenged the accuracy of statements in his biography on the company website.

The original biography on the website says, in part:

Mr. Reys also served as Chief Executive Officer and President of Genespan, a cell expansion and DNA biotechnology company which was acquired by CellCyte. He served as Chief Executive Officer, President and Chief Financial Officer for Clear Medical where he positioned the company as the first FDA approved high-level disinfectant re-processor of medical devices. Most recently, he served as the President and Chief Executive Officer of Cennapharm, a biopharmaceutical company which he co-founded, taking the Company from conception to early human clinical trials in 18 months. Mr. Reys attended the University of Washington where he majored in finance, later receiving a CPA designate. Mr. Reys is a past member of the Washington Society of Certified Public Accountants. He also serves as a member of the University of Washington’s Graduate School, M.B.A. Mentor Advisory Board.

That part has been removed, and instead, the recently revised biography now says:

More recently, Mr. Reys served as Chief Executive Officer and President of Genespan, a cell expansion and DNA biotechnology company, Clear Medical, a medical device re-processor, and Cennapharm, a biopharmaceutical company which he co-founded. Mr. Reys attended the University of Washington where he majored in finance, later receiving a CPA designate.

After the original biography was questioned, the stock price dropped 55% this past Monday and Tuesday, with heavy selling.

Like Usana executive Gil Fuller, Reys says lies in the biography were “unintentional.” Funny how that happens at public companies… someone unintentionally writes lies in biographies!

The Seattle Times is still challenging parts of the biography of Reys, and writes the following:

  • Both documents state that he “attended the University of Washington and majored in finance.” According to university records, however, he enrolled in autumn 1965 and withdrew within weeks; he did not receive any credits toward a degree. Asked about the discrepancy, Reys said in an e-mail that he attended some night-school business classes at the university and was forced to withdraw from the full-time program due to financial hardship. He said he later enrolled at Auerswald’s Business University, a one-time Seattle business college.
  • Both documents say Reys received a “CPA designate,” and until late last week the Web site said he was a past member of the Washington Society of Certified Public Accountants. But the Washington state Board of Accountancy says he is not registered as a certified public accountant, nor does it have any record that Reys took the CPA test in the state. Reys said that in 1967 he passed the test on his second try after enrolling in a CPA coaching course at Auerswald’s, and became a member of the Washington Society of CPAs until 1969. He added that he never claimed to be “a practicing CPA.” Reys’ membership in the association couldn’t be verified because the association’s records, unlike the Board of Accountancy’s, do not extend back to the 1960s.

The Seattle Times also printed the following:

The background of executives plays an outsized role in biotech companies’s bid to attract investors, said Paul Latta, a Seattle-based analyst with McAdams Wright Ragen.

“If you can bring management to the table who has a track record of getting drugs through the process, it automatically brings credibility,” he said.

This might explain the wording in the original bio, which claimed that Reys quickly brought a product to human trials. The company he worked for, Cennapharm, claims in court documents that the company’s products were never tested on humans.

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