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Elizabeth Dragon, Central Figure in Sequenom Trisomy 21 Scandal, Dies

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Elizabeth Dragon, the former executive at Sequenom who admitted to lying about the firm's Trisomy 21 test, which led to an artificial inflation in the company's stock price, has died five months before she was to be sentenced for committing securities fraud.

Sequenom's annual report, which was released on March 9, reported her death, and an article in an online publication called BNET said she died on Feb. 26. Dragon's attorney Robert Gooding told the magazine she died of natural causes.

Dragon, the former senior vice president of R&D at Sequenom, was a central figure in a scandal that shook the company two years ago and which still has not completely played out.

In April 2009, the San Diego-based company said that certain employees had mishandled R&D test data and results for its SEQureDx Down syndrome test. Five months later, after an internal investigation, Dragon and former CEO Harry Stylli were fired by Sequenom. Three other employees were fired and two other executives resigned.

"While each of these officers and employees has denied wrongdoing, the special committee's investigation has raised serious concerns, resulting in a loss of confidence by the independent members of the company's board of directors in the personnel involved," the San Diego-based firm said in a statement at the time.

By then, the US Securities and Exchange Commission had started its own investigation into the matter, and in June 2010, it charged Dragon with making "materially false and misleading statements" about the Trisomy 21 test, thereby inflating the company's stock. She pleaded guilty to the charges and was scheduled to be sentenced last August. However, after she agreed to help the SEC in its continuing investigation into Sequenom, the agency delayed the sentencing date to July 30, 2011, according to court records.

"Prior to sentencing, Dr. Dragon passed away in February 2011," Sequenom said in its annual report filed with the SEC.

The investigation by the SEC may be wrapping up. During Sequenom's fourth-quarter and full-year 2010 earnings conference call in March, company Chairman and CEO Harry Hixson said that the SEC staff told the firm that it was considering bringing civil injunction against the company "alleging that we violated certain anti-fraud and books of record" infractions.

As a result, Sequenom planned to negotiate a resolution with the SEC.

Sequenom has provided no update on the matter since then, though it may do so on its first-quarter 2011 earnings call later today.

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