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Antigenics Accuses Piper

Antigenics Says Piper Jaffray Stopped Coverage Of Stock After Biotech Yanked Business

Apr 2, 2002 | CNN/Money

Biotechnology company Antigenics Inc. claims investment bank U.S. Bancorp Piper Jaffray stopped analyst coverage in retaliation for the biotech taking its business to a rival bank.

Antigenics (AGEN: down $0.07 to $13.26, Research, Estimates) CEO Garo Armen told CNNfn Tuesday Piper Jaffray, which handled the company's initial public offering in 2000, stopped coverage by analyst Peter Ginsburg after Antigenics decided to use UBS Warburg for a $60 million secondary offering.

On Dec. 17 Piper Jaffray issued a report with a very strong buy recommendation on Antigenics," Armen told CNNfn. "Several days later we informed Piper we decided to go with UBS ... for reasons which had to do with greater exposure."

"Piper promptly informed me on the phone that they would discontinue coverage of Antigenics and stop making a market in Antigenics to teach us a lesson," he said.

Piper did discontinue coverage of the stock on Jan. 4 but insists that no payback was involved.

"The accusations made by Antigenics are simply untrue," a spokeswoman for Piper Jaffray told CNNfn. "U.S. Bancorp Piper Jaffray has not taken retaliatory action or otherwise attempted to damage Antigenics in any way, nor would we."

But Armen said documents from Piper demonstrate that the investment bank has already acknowledged his version of the sequence of events as correct.

"We think what happened was a malicious attempt to disrupt our operations by an investment firm for the sake of their business activities according to their agenda," he said. "We believe this is unethical and is a practice which should discontinue."

Piper Jaffray declined an invitation for someone from the company to appear on CNNfn.

The spotlight is already on the separation of the research and banking departments of brokerages after New York State Attorney General Eliot Spitzer acquired a court order demanding changes at Merrill Lynch to correct what Spitzer described as a breakdown in Merrill's rating system.

Spitzer said e-mails and other documents show ratings of stocks by Merrill Lynch's Internet analysts were motivated by investment banking relationships with the companies rather than on actual research and opinion.

Merrill (MER: up $0.84 to $48.35, Research, Estimates) said there is no basis for Spitzer's allegations, that the attorney general is "dead wrong," but Merrill is in discussions about a possible settlement. A stay of the court order obtained by Merrill runs out at noon on Friday.

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