Vanda Pharmaceuticals Inc. (VNDA) Accused of Defrauding the Government

According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1934 between November 4, 2015 through February 11, 2019, Vanda Pharmaceuticals Inc. (VNDA) owns and markets two drugs Fanapt and Hetlioz. Over the years, Vanda had repeatedly attested to its internal control over financial reporting and the disclosure of all fraud. However, it failed to disclose adverse facts pertaining to its business and operations that would result in increased scrutiny and legal troubles. In October 2018, the FDA found Vanda's website "false and misleading" and in violation of the Federal Food, Drug, and Cosmetic Act. The FDA raised its concerns with the promotional materials for its drugs, and sent Vanda a Warning Letter in response to the review. On this news, Vanda shares fell almost 10% over the next two trading days to close at $20.00 per share on October 24, 2018. In February 2019, Aurelius Value published a report that revealed a previous unreported qui tam complaint that disclosed Vanda's years of fraudulent promotion of Fanapt and Hetlioz and Vanda's scheme to defraud the government through fraudulent reimbursements. The whistleblower complaint further detailed Vanda's participation in a fraud involving doctors, falsification of documents in its internal systems, and the resignations of senior executives who refused to participate.

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