July 1, 2020

VIA E-MAIL
Joseph G. Sansone,
Chief, Market Abuse Unit, U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-2977
sansonej@sec.gov

Re:

Violations of Securities Laws by Moderna, Inc., Its Officers, and Former Board
Member

Dear Mr. Sansone:
I am President and founder of Accountable.US, a non-profit organization that monitors
public corruption on a non-partisan basis. I write to alert the U.S. Securities and Exchange
Commission (“SEC”) regarding potential violations of the U.S. securities laws committed by
officers and a board member of Moderna, Inc., and also possibly by the company itself. This
misconduct was particularly egregious because it involved not only financial fraud and
manipulation of the financial markets, but also because it exploited widespread fears surrounding
the ongoing COVID-19 pandemic. I strongly urge the SEC to investigate these matters.
BACKGROUND
COVID-19 has now claimed over 300,000 deaths worldwide, with almost a third of those
deaths in the United States. The pandemic, caused by a highly contagious strain of the
coronavirus, has brought the world’s largest economies to a halt as they impose quarantines,
enact travel restrictions, and implement emergency economic measures. We are now living in the
largest economic recession since the Great Depression. The best medical and scientific minds are
now working around the clock to develop treatments for the virus; every company with
involvement in relevant technology is racing to develop a vaccine that will save lives and rescue
the world’s economy. The financial benefit to the company that develops this vaccine is obvious.
A. The stock price of Moderna Inc. rose dramatically in response to encouraging news
about an experimental vaccine for coronavirus.
Given the public’s desperation, it came as good news when on May 12, 2020, Moderna,
Inc., a publicly-traded biotech company based in Cambridge, Massachusetts, announced

 significant steps toward achieving this holy grail. On May 12, Moderna issued a key press
release regarding the progress of its vaccine research.1
The release included two announcements.2 First, it stated that the company had received
Fast Track designation from the U.S. Food and Drug Administration (FDA) to test its
experimental coronavirus vaccine.3 The designation was important because it provided for “early
and frequent communication with the FDA, in addition to a rolling submission” of a marketing
application for the anticipated vaccine.4 Second, and potentially more importantly, the press
release stated that the FDA had completed its review of Moderna’s Investigational New Drug
application, approval of which determined whether the company’s research could proceed into a
Phase 2 study, an important predicate to ultimate approval of the vaccine.5 The press release
included optimistic quotes regarding the vaccine by Moderna’s Chief Medical Officer, Tal Zaks,
M.D., Ph.D.6
Days later, on May 18, the company issued another key press release, this time relating to
promising results of Moderna’s Phase 1 testing, another important milestone to ultimate approval
of the vaccine.7 The second press release touted the findings of a safety trial showing that the
vaccine caused eight participants to develop antibodies that could protect against the disease. The
second press release also quoted Dr. Zaks.8
As would be expected, the financial markets responded enthusiastically to these widelycirculated public announcements. On the same day that Moderna announced the hopeful findings
of its safety trial, the company’s stock price reached an all-time high of $87 a share, up 344%
from its January 2 opening price of $19.57.9 That was a culmination of a steady rise in stock

1

Press Release, Moderna Receives FDA Fast Track Designation for mRNA Vaccine (mRNA-1273) Against
Novel Coronavirus, May 12, 2020, available at: https://investors.modernatx.com/node/8931/pdf.
2

Id.

3

Id.

4

Id.

5

Press Release, Moderna Receives FDA Fast Track Designation for mRNA Vaccine (mRNA-1273) Against
Novel Coronavirus, May 12, 2020, available at: https://investors.modernatx.com/node/8931/pdf.
6

Id.

7

Press Release, Moderna Announces Positive Interim Phase 1 Data for its mRNA Vaccine (mRNA-1273)
Against Novel Coronavirus, May 18, 2020, available at: https://investors.modernatx.com/node/8986/pdf
8
9

Id.

Matthew Fox, Moderna Falls 20% Amid Reports That Insiders Have Sold $89 Million in Shares This Year as
The Stock Has Spiked, Business Insider (May. 27, 2020), available at:
https://markets.businessinsider.com/news/stocks/moderna-stock-price-amid-millions-insider-sales-sharescoronavirus-vaccine-2020-5-1029238487

 prices since the May 12 announcement.10 Both these public announcements were significant for
one clearly-evident reason: People are desperate for a vaccine.
Observers anticipated Moderna’s press release dated May 18 after President Trump
appointed Dr. Moncef Slaoui to lead a national effort to develop, manufacture, and distribute
COVID-19 vaccines. Notably, Dr. Slaoui sat on Moderna’s Board of Directors until he stepped
down on May 15, 2020, to accept the appointment. That same day, he stood alongside the
President of the United States in a Rose Garden ceremony and announced to the nation: “I have
very recently seen early data from a clinical trial with a coronavirus vaccine. And this data made
me feel even more confident that we will be able to deliver a few hundred million doses of
vaccine by the end of 2020.”11 Given the board position that Dr. Slaoui had just left, he did not
need to mention Moderna by name to make clear where he had seen the promising “early data.”
Indeed, when he made the statement, at least one national periodical, The New York Times,
associated his comments with Moderna.12
B. Moderna’s stock price plummeted as medical experts cast doubt on the studies’
findings.
The boost to Moderna’s financial value was short-lived. Over the next few days,
investors’ confidence plummeted as medical experts began to cast doubt on the study’s findings.
One physician pointed out that the results involved only a small number of patients and left many
unresolved questions about its efficacy in different populations, potential adverse effects, and the
scalability of the treatment.13 Moreover, although Moderna’s press releases had touted favorable
results for eight patients out of forty-five, the announcements were silent as to the remaining
thirty-seven participants.14 These revelations have caused dramatic declines in the Moderna’s
share price, causing the stock to lose a third of its value since the meteoric rise following the
company’s press releases on May 12 and May 18, and Dr. Slaoui’s statement on May 15.15

10

Historical Data, Moderna, Inc., Yahoo! Finance, https://finance.yahoo.com/quote/MRNA/history?p=MRNA

11

The White House. Remarks by President Trump on Vaccine Development (May 15, 2020), available at:
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vaccine-development/
12
David E. Sanger, et al., Trump Vows Vaccine by End of Year, and Mobilizes Military to Help, N.Y. TIMES,
May 18, 2020, https://www.nytimes.com/2020/05/15/us/politics/coronavirus-vaccine-timeline.html
13

Alaric Dearment, Experts Cautiously Optimistic On Moderna’s Early Covid-19 Vaccine Data As Market
Exuberance Fades, MEDCITY NEWS (May 20, 2020), https://medcitynews.com/2020/05/experts-cautiouslyoptimistic-on-modernas-early-covid-19-vaccine-data-as-market-exuberance-fades/.
14

Helen Branswell, Vaccine Experts Say Moderna Didn’t Produce Data Critical to Assessing Covid-19
Vaccine, STAT (May 19, 2020), https://www.statnews.com/2020/05/19/vaccine-experts-say-moderna-didntproduce-data-critical-to-assessing-covid-19-vaccine/.
15

Joe Tenebruso, Why Moderna Stock Dropped Today, NASDAQ (May 27, 2020),
https://www.nasdaq.com/articles/why-moderna-stock-dropped-today-2020-05-27.

 C. Senior executives at Moderna sold millions in stocks and profited heavily from their
trades.
Evidence suggests that Moderna and at least two of its officers, possibly among others,
may have improperly exploited coronavirus fears to boost the company’s value, as well as their
own bank accounts, through the short-term financial boost from public announcements regarding
the company’s vaccine testing. As the stock price rose following the announcements, at least two
top executives earned millions in profits from exercising stock options and selling Moderna
shares.
According to SEC disclosures, Chief Financial Officer Lorence Kim, M.D. sold 502,000
shares of Moderna stock between May 12 and May 18 while the stock was near its peak value.16
Those shares had a total value of approximately $36,643,134.17. Id. This was a dramatic
departure from Dr. Kim’s previous trading activity: Between January 1, 2020 and May 11, 2020,
Dr. Kim had only sold 140,000 shares of Moderna stock, at a total value of $3.7 million.17
According to Moderna, these trades were scheduled in advance under an automated 10b5-1 plan,
before he was aware of material non-public information relating to test results and the company’s
imminent press announcements on May 15 and May 18. Following the public disclosure of these
trades, Kim has announced without explanation that he will be leaving Moderna in August
2020.18
Likewise, SEC disclosures show that Dr. Zak sold a high number of Moderna shares in
the period roughly corresponding to Moderna’s press announcements on May 12 and May 18.
Starting on May 12 and ending on May 19, Dr. Zaks sold 250,088 shares of Moderna Stock, for a
total value of approximately $17,829,420.30.19 These sales also represented much larger
quantities than Dr. Zaks had historically sold. In the first five months of 2020 combined, Dr.
Zaks had only sold 104,770 shares of Moderna stock.20 Moderna has also claimed that Dr. Zak’s
trades were pre-scheduled through an automated 10b5-1 plan, supposedly before he was in
possession of material non-public information, such as the May 12 and May 18 public
announcements.21

16

See Appendix A, Trading Activity of CFO Lorence Kim, May 12, 2020 – May 18, 2020.

17

See Appendix B, Trading Activity of CFO Lorence Kim, January 1, 2020 – May 11, 2020.

18

Moderna Reports First Quarter 2020 Financial Results and Provides Business Updates, BUSINESS WIRE
(May 7, 2020), https://www.businesswire.com/news/home/20200507005478/en/Moderna-Reports-Quarter-2020Financial-Results-Business.
19

See Appendix C, Trading Activity of CMO Zaks Tal Zvi, May 12, 2020 – May 18, 2020.

20

See Appendix D, Trading Activity of CMO Zaks Tal Zvi, January 1, 2020 – May 11, 2020.

21

Michael Hiltzik, Column: Moderna Execs Sold $29 Million In Stock After Its Early Vaccine Announcement,
L.A. TIMES (May 26, 2020), https://www.latimes.com/business/story/2020-05-26/moderna-execs-stock-sales.

 POSSIBLE SECURITIES VIOLATIONS
The above facts potentially give rise to two distinct violations of the federal securities
laws that merit investigation by the SEC, as well other law-enforcement authorities.
The suspicious coincidence of the timing of the trades by Drs. Kim and Zaks in
conjunction with Moderna’s public announcements, which were ultimately undermined by
experts, raises serious questions—specifically, whether Drs. Kim and Zaks traded on the basis of
material nonpublic information in violation of Section 10(b) of the Securities Exchange Act of
1934 (Exchange Act) and its implementing regulation, Rule 10b-5. See 15 U.S.C. § 78j(b); 17
C.F.R. § 240.10b5-1. If the executives knew about the results of Moderna’s test trials and public
announcements relating to the trials, and set trades exploiting their foreknowledge under 105-1
plans, they profited by violating the federal securities laws.
Indeed, the SEC prosecuted similar misconduct in the cases of Drs. Franklin M. Chu and
Daniel J. Lama in the Central District of California.22 In those cases, the Commission alleged
that the defendants, two medical investigators who led clinical trials for an experimental drug to
treat prostate cancer, learned that the FDA was halting the trials because of negative side effects.
The Commission brought charges against Dr. Chu for insider trading, charges that resulted in
disgorgement and civil penalties for Chu and Lama.23
Moderna has explained the massive uptick in trading activity by Drs. Kim and Zaks by
explaining that the transactions were through Rule 10b5–1 trading plans, such that the sales
were planned before the executives learned of the trial results or the press announcements.24 But
questions still remain about (1) when the trades were scheduled; (2) when Drs. Zaks and Kim
learned of the test results and press announcements that naturally would be expected to—and, in
fact, did—boost the company’s share price; (3) and why Moderna chose to release the statements
when it did.
Moreover, the Commission should also investigate whether Moderna and corporate
principals illegally manipulated the financial markets, particularly Dr. Slaoui, whose statement in
the Rose Garden regarding knowledge of successful vaccine trials surely boosted Moderna’s
reputation. As you are aware, a defendant commits market violation in violation of the
Commodity Exchange Act when the defendant possesses an ability to influence market prices
and intentionally causes artificial price inflation. See In re Amaranth Nat. Gas Commodities
22
See SEC v. Franklin M. Chu, Civil Action No. 5:14-cv-00995 (C.D. Cal.); SEC v. Daniel J. Lama, Civil
Action No. 5:14-cv-00996 (C.D. Cal.).
23

Litigation Release, SEC Charges Two Clinical Drug Trial Doctors with Insider Trading, May 19, 2014,
available at: https://www.sec.gov/litigation/litreleases/2014/lr22996.htm
24

Michael Hiltzik, Column: Moderna Execs Sold $29 Million In Stock After Its Early Vaccine Announcement,
L.A. TIMES (May 26, 2020), https://www.latimes.com/business/story/2020-05-26/moderna-execs-stock-sales.

 Litig., 730 F.3d 170, 173 (2d Cir. 2013). Given Dr. Slaoui’s former position on Moderna’s Board
of Directors and high-profile political appointment, his highly-publicized reference to personal
knowledge of a vaccine breakthrough could only be understood by the public as a preview to
imminent \promising news regarding Moderna’s vaccine trials. His influence, magnified by the
platform provided by the Rose Garden, gave Dr. Slaoui ample opportunity to inflate Moderna’s
stock price artificially. Thus, the Commission should also investigate his conduct, and whether it
was coordinated with others at Moderna.
CONCLUSION
In sum, the activities described above suggest that securities laws, as well as federal
criminal laws, may have been violated by Moderna, and Drs. Kim, Zaks, and Slaoui. I
recommend a full investigation by federal law-enforcement authorities to either lay these
suspicions to rest, or to rectify this misconduct through legal process.
Very truly yours,

Kyle Herrig
President, Accountable.US
Enclosures
cc:

Carl W. Hecker,
Inspector General, Office of the Office of Inspector General, SEC
Andrew Lelling
United States Attorney
Office of the U.S. Attorney for the District of Massachusetts
Robert Zink
Chief, Fraud Section, Criminal Division, U.S. Department of Justice

 APPENDIX A
Trading Activity of CFO Lorence Kim
(May 12, 2020 – May 18, 2020)

Date
5/12/2020
5/12/2020
5/12/2020
5/12/2020
5/12/2020
5/12/2020
5/12/2020
5/12/2020
5/15/2020
5/15/2020
5/15/2020
5/15/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020
5/18/2020

Amount of
Shares
11,643
229,357
35,182
31,948
104,544
61,412
5,677
2,237
2,600
5,442
9,715
2,243
29,022
211,978
3,768
7,640
18,675
35,569
16,736
56,379
59,175
33,792
5,868
2,600
798

Acquired (A) or
Disposed (D)
A
A
D
D
D
D
D
D
D
D
D
D
A
A
D
D
D
D
D
D
D
D
D
D
D

Share Price

Value

Cite

$12.21
$10.90
$62.56
$63.57
$64.67
$65.47
$66.43
$67.32
$63.80
$64.96
$66.05
$66.68
$14.22
$12.21
$76.45
$77.48
$79.40
$80.24
$81.43
$82.28
$83.33
$84.27
$85.16
$86.54
$86.96

$142,161.03
$2,499,991.30
$2,200,985.92
$2,030,934.36
$6,760,860.48
$4,020,643.64
$377,123.11
$150,594.84
$165,880.00
$353,512.32
$641,675.75
$149,563.24
$412,692.84
$2,588,251.38
$288,063.60
$591,947.20
$1,482,795.00
$2,854,056.56
$1,362,812.48
$4,638,864.12
$4,931,052.75
$2,847,651.84
$499,718.88
$225,004.00
$69,394.08

SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/14/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020
SEC Form 4, 5/19/2020

 APPENDIX B
Trading Activity of CFO Lorence Kim
(January 1, 2020 – May 11, 2020)

1/22/2020
1/27/2020
1/28/2020
2/7/2020
2/25/2020
2/25/2020

Amount of
Shares
2,000
23,805
900
33,295
100
1,248

Acquired (A) or
Disposed (D)
D
D
D
D
D
D

2/26/2020

12,819

2/26/2020
2/26/2020
3/4/2020
3/16/2020
3/16/2020
3/16/2020
3/16/2020
4/15/2020

Date

Share Price

Value

Cite

$23.04
$23.01
$23.37
$23.06
$26.14
$25.59

$46,080.00
$547,753.05
$21,033.00
$767,782.70
$2,614.00
$31,936.32

SEC Form 4, 1/23/2020
SEC Form 4, 1/29/2020
SEC Form 4, 1/29/2020
SEC Form 4, 2/11/2020
SEC Form 4, 2/27/2020
SEC Form 4, 2/27/2020

D

$28.79

$369,059.01

SEC Form 4, 2/27/2020

745
5,088
20,000
2,792
6,704
9,370
1,134
6,177

D
D
D
D
D
D
D
D

$29.46
$27.96
$27.71
$24.68
$25.85
$26.74
$27.39
$34.24

$21,947.70
$142,260.48
$554,200.00
$68,906.56
$173,298.40
$250,553.80
$31,060.26
$211,500.48

SEC Form 4, 2/27/2020
SEC Form 4, 2/27/2020
SEC Form 4, 3/5/2020
SEC Form 4, 3/18/2020
SEC Form 4, 3/18/2020
SEC Form 4, 3/18/2020
SEC Form 4, 3/18/2020
SEC Form D, 4/16/2020

4/15/2020

1,517

D

$35.81

$54,323.77

SEC Form D, 4/16/2020

4/15/2020
4/15/2020
4/15/2020

4,566
7,340
400

D
D
D

$36.57
$37.62
$38.24

$166,978.62
$276,130.80
$15,296.00

SEC Form D, 4/16/2020
SEC Form D, 4/16/2020
SEC Form D, 4/16/2020

 APPENDIX C
Trading Activity of CMO Zaks Tal Zvi
(May 12, 2020 – May 19, 2020)

Date

Amount of
Shares

Acquired (A) or
Disposed (D)

Share Price

Value

Cite

5/12/2020

1,365

D

$66.43

$90,676.95

SEC Form 4, 5/14/2020

5/12/2020

19,817

D

$63.59

$1,260,163.03

SEC Form 4, 5/14/2020

5/12/2020

125,044

A

$12.21

$1,526,787.24

SEC Form 4, 5/14/2020

5/12/2020

25,905

D

$65.46

$1,695,741.30

SEC Form 4, 5/14/2020

5/12/2020

17,744

D

$62.65

$1,111,661.60

SEC Form 4, 5/14/2020

5/12/2020

300

D

$67.23

$20,169.00

SEC Form 4, 5/14/2020

5/12/2020

59,913

D

$64.72

$3,877,569.36

SEC Form 4, 5/14/2020

5/19/2020

125,044

D

$78.16

$9,773,439.04

SEC Form 4, 5/20/2020

5/19/2020

12,563

A

$12.21

$153,394.23

SEC Form 4, 5/20/2020

5/19/2020

112,481

A

$12.21

$1,373,393.01

SEC Form 4, 5/20/2020

 APPENDIX D
Trading Activity of CMO Zaks Tal Zvi
(January 1, 2020 – May 11, 2020)

Date

Amount of
Shares

Acquired (A) or
Disposed (D)

Share Price

Value

Cite

2/21/2020

10,000

D

$18.47

$184,700.00

SEC Form 4, 2/24/2020

2/28/2020

16,1120

A

$25.93

$4,177,841.60

SEC Form 4, 3/3/2020

2/28/2020

10,000

D

$23.38

$233,800.00

SEC Form 4, 3/3/2020

3/6/2020

10,000

D

$27.98

$279,800.00

SEC Form 4, 3/9/2020

3/13/2020

10,000

D

$23.00

$230,000.00

SEC Form 4, 3/16/2020

3/20/2020

10,000

D

$29.13

$291,300.00

SEC Form 4, 3/23/2020

3/27/2020

10,000

D

$28.37

$283,700.00

SEC Form 4, 3/30/2020

4/3/2020

10,000

D

$32.81

$328,100.00

SEC Form 4, 4/6/2020

4/13/2020

10,000

D

$32.00

$320,000.00

SEC Form 4, 4/14/2020

4/17/2020

10,000

D

$48.81

$488,100.00

SEC Form 4, 4/20/2020

4/24/2020

10,000

D

$47.15

$471,500.00

SEC Form 4, 4/27/2020

5/5/2020

4,770

D

$50.48

$240,789.60

SEC Form 4, 5/6/2020