NEW JERSEY: Johnson & Johnson Chief Executive Alex Gorsky on Monday faced questions from plaintiffs lawyers over the timing of his sale of company stock, as he testified for the first time in a jury trial over allegations that the company’s Baby Powder causes cancer.
Gorsky told the jury that he had sold company shares in November 2018, two days after a Reuters reporter contacted the company and summarised in an email her review of documents that showed J&J knew small amounts of asbestos had been found in its talc on occasion since 1971.
Gorsky testified that he was not shown the email from the reporter at the time of the stock sale.
On December 14, 2018, Reuters published the story that showed J&J had failed to disclose that small amounts of asbestos, a known carcinogen, had sometimes been found in its talc over several decades. After the Reuters report was published, a sell-off wiped out more than $40 billion from the company’s market value.
At the time, J&J dismissed the report as “an absurd conspiracy theory.” “My trade took place at a time when I did not have that kind of knowledge about the article,” Gorsky said on Monday. Gorsky testified that he followed all of the appropriate approval processes with the company’s board of directors and legal team regarding the sale of company shares after exercising stock options. J&J faces more than 16,000 lawsuits alleging it sold powders contaminated with asbestos and failed to warn users. It also faces a federal criminal investigation into how forthright it has been about the products’ safety. Filings made by J&J to the US Securities and Exchange Commission show that Gorsky sold $38.6 million of company stock on November 16, two days after Reuters made its findings known to the company. — Reuters
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