In a recent PR Newswire article a lawsuit against Laidlaw & Company was detailed. The presenters of the suit, Relmada Therapeutics, Inc., claimed that Laidlaw erred in handling an effort to raise capital for the company. Relmada obtained the services of Laidlaw & Co. when they went public in 2011, and their initial public offering was in the neighborhood of $20/share. The value of Relmada has been on a steady decline since and now trades below $3/share. The issue between the two companies began when Relmada sought out Laidlaw to raise more capital for its business, which is the production of pharmaceuticals, to combat the debilitating effects of pain. The response of this second effort by Laidlaw was for the Relmada stock to spike upwards but has since tapered off.
Relmada Therapeutics Files Amended Complaint Against Laidlaw and Its Principals, Matthew Eitner and James Ahern
The management skills of Matthew Eitner
and James Ahern
have been called into question, and many negatives have been mentioned about Laidlaw & Co. that is not uncommon for an investment banking firm. The education of Matthew Eitner has also been challenged; he is a young man who wears designer clothes but, unfortunately, makes expensive clothes look cheap on him.
It may come down to a simple matter of whom do you trust. Both these companies have negative reputations; Relmada is an upstart while Laidlaw
has been around for 170 plus years. It is easy to blame investment banks for misleading investors, but companies like Relmada should have research teams to determine whom to use. Laidlaw helped Relmada with its IPO, and it was natural that they would return there for future financial help.
Laidlaw feels its position with Relmada should allow them to select members to the board of directors for Relmada and I agree. In the matter of a hostile takeover of Relmada by Laidlaw; it will be an interesting fight to witness.