Monday, November 30, 2020

Moderna Executives' Stock Sales Raise Concerns (SEPT 2020)

 Company Background

Moderna is an American biotechnology company that was founded in Cambridge Massachusetts. The company is focused on drug development, discovery, and vaccine developments using the messenger mRNA. Moderna believes that the “potential implications of using mRNA as a drug are significant and far-reaching and could meaningfully improve how medicines are discovered, developed and manufactured” (Moderna). Since founded in 2010, the company has built up industry leading mRNA technology, the infrastructure to drug development and discovery, and an expanding pipeline. Their pipeline consists of vaccine developments based off of mRNA and therapeutics that span across several areas. Moderna's mission is “Deliver on the promise of mRNA science to create a new generation of transformative medicines for patients”(Moderna).

As stated before, Moderna was thrusted into the vaccine development race when Covid-19 first started. In January 2020, they announced a development of a mRNA vaccine. They then partnered up with the NIAD (National Institute of Allergy and Infectious Diseases) and completed Phase 1 of the vaccine. The FDA gave them clearance for Phase 2 which was completed successfully. However after a couple of phases, Moderna began to receive suspicion because they were not releasing any data of the vaccine. However, they shut this down as they released the data supporting the statements of the company. On top of that, Moderna recently came out after Phase 3 of the vaccine, saying that the vaccine was 94% effective against Covid-19. Moderna has become a crucial company in hopes of slowing down or eliminating the spread of Covid-19.

Moderna company logo                                                    

The Case

Modernas development of a vaccine started in January 2020 when they released a statement saying they were going to try and produce a mRNA vaccine to fight the virus. This news brought excitement and joy to people as their hopes of the pandemic ending quickly rose up. Investors were also very happy with the news as the company stock was on the uprise. The bottom line is, Modernas executives whether the company’s vaccine works or not, has made millions upon millions of dollars. This is obviously great for them, but many people are suspicious of them participating in inside selling.

The suspicious stock selling came into fruition after the announcement of the positive results in Phase 1 of the development of the vaccine. The success of Phase 1 came during the month of May. After the news broke of this success, the stock jumped 30% and to an all time high of 87 dollars. In the days following the announcement, Modernas executives sold about 90 million dollars worth of shares. This caught the eyes of Accountable.US who sent a letter encouraging the head of the SEC to take a look. The SEC is known as the Security and Exchange Commission. Their responsibility is to regulate the securities markets and protect investors. However, the SEC refused to state if they are going to look into the allegations against Moderna and its company. Following the allegations, Moderna came out with a statement a couple days later defending the stock sales of their executives. The company stated “ Executive sales are made under pre-planned 10b5-1 plans, which are executed during open trading windows in accordance with the company's insider trading policy. As a matter of practice, Moderna does not intend to comment on any alleged or potential litigation or investigation; nor on purchases or sales by individual investors or groups”(Moderna). This statement did not stop people from digging however.

As mentioned before Moderna has stated that its executives pre schedule their stock sales in advance. This technique is known as 10b5-1 plans and can act as a defense to insider trading. However, these plans have to be put in before an executive knows any non public information. If they schedule their sales dates because they know when a big announcement about the vaccine is coming out, that would be considered insider trading. After diving into the 105b5-1 plans, the company NPR was able to find multiple executives who had changed or adopted their plans just before a huge announcement from Moderna. This has brought up the idea that executives may have known about nonpublic information when they made those changes.

On January 21, 2020, Chief Medical Officer Dr. Tal Zasks amended his 10b5-1 plans. His reasons for changing them are unknown. However, on Jan 22, Moderna confirmed it was working with the government to produce a vaccine. The following day, Jan 23rd, they announced that it was receiving more support and additional funding for the vaccine. This made the stock rise up, but the bigger question is whether the Doctor knew this knew this was coming. Maybe that is why he modified his plans. Moderna has stated thatthe legal team only allows employees to change their 10b5-1 plans if they do not possess inside information that could affect the company's share price”(Moderna). Later on in the year, on Friday March 13, three Moderna executives adopted new plans for their 10b5-1. These three people were Dr. Zaks, Chief Financial Officer Lorence H. Kim, and Chief Technical Operations Juan Andres. On monday March 16, which is technically only one business day away, Moderna announced that it has given a participant the vaccine as a part of phase 1 of the vaccine. The stock jumped 24% compared to the previous day. 

On May 21, in between announcements of their major vaccine developments between the 18th-29th, CEO Bancel changed his 10b5 plans. On June 1st, President Hoge also amended his plans. The suspicion began to rise more and more. How come they were changing during plans and then big announcements were dropping? It looks like inside trading. In August, Moderna admitted that the changes have created suspicion and a bad impression. To stop this, all of their executives agreed not to change their 10b5-1  plans or add new shares to existing ones. This was to control the suspicion that was widely growing.

  Moderna will always be under suspicion because of their actions. It does not help that a couple of executives have sold their stocks to 0 percent or all of them. Why would you sell all of your stock if you believe that the vaccine will be successful. You will make more money when that time comes. All of these actions and changes have kept Moderna under the microscope.


Moderna must keep trust between their stakeholders and themselves. It will lead to more success for both of them. If they are proven to be inside selling, the trust between them and stakeholders take a big hit. You can not trust liars or associate with a company breaking the law. Moderna had three alliances with AstraZeneca. Their first alliance focused on developing mRNA treatment for cardiovascular disease. They are also partnered with MERCK, in which they focus on developing mRNA for virus infections and cancer. The last partnership they have is with VERTEX, in which they focus on development of mRNA medicines for cystic fibrosis. All three of these partnerships are huge for the company and Moderna has to stay committed to keep them.

Moderna has over 900 shareholders in its company. The biggest shareholder is Fidelity Management and Research company. They own 8.66% of the company which is over 34 million shares. The Vanguard Group, Inc owns the second most and the Blackrock Fund Advisors wraps up the top 3. Many people and companies have invested in this company. They need to keep this in mind and follow the rules. If they do not, their investors will get hurt.


From an individualist perspective, Moderna executives are acting ethical. Milton Friedman, who is a Nobel Prize winning economist,  established that “businesses must maximize for the owners of the business, but do so within the law. On top of that, any action or plans not aimed at  maximizing profits is considered stealing from the executives (Salazar 17). In this case, Moderna executives are doing the same things Friedman preached. Moderna executives have already sold millions and millions of dollars worth of stock. They are maximizing their profit and doing it effectively.  Their stock is on the rise as more and more information of the vaccine keeps coming out. Modernas CEO, Stephen Bancel, has sold nearly 40 million worth of stock, while Chief Medical Officer Tal Zaks has sold around 60 million. Plus, stockholders are bringing in tons of money as the stock continues to rise. So when it comes to individualism, the executives are following one part of Friedman theory of individualism, as they keep raking in millions of dollars.

As for the other part of the theory, which is keeping it within the law, moderna executives are doing that as well. Many people may find the changes of the 10b5-1 plans as very suspicious and they are not wrong. Changes within days of an announcement will raise a lot of eyes. People begin to speculate that the company is in fact  inside trading. However, there has been no such evidence that has emerged indicating that executives sold stock based on confidential internal information (NPR).  The executives are simply making the right moves whether people like it or not. If they were breaking the law, they would not be acting ethically in an individualist perspective. However, with no evidence against them and just speculation, an individualist would be happy that they are cashing in millions and doing it within the law.

CEO Stephen Bancel                    



From a utilitarian perspective, Moderna executives are acting ethical as well. Utilitarianism wants business actions aimed at  maximizing  happiness for in the long run for all conscious human beings affected by that business action (Salazar 19). In this case, Moderna executives have not been unethical. They have not been unethical as they are definitely very happy with their sales of stock and the tons of money they have been making. Plus, other people who own stock in Moderna are definitely happy as the stock continues to grow. Moderna is making a lot of people happy whether people like it or not. They are getting closer and closer to developing a vaccine, which will help stop this awful pandemic. They have a lot of support from the people and from a utilitarian perspective.

Utilitarianism focuses on actions and the consequences of those actions. From there, you determine if that action will maximize happiness.  So let's take a look at a company action at Moderna. In terms of the changing of 10b5-1 plans, there is no real negative consequence. There has been no evidence against those executives so it has not led to legal trouble. It just brought a little more attention to the company as more people will begin to observe them and make sure they follow the rules. The executives will still be happy with eyes on or off them. Their company is doing great.

Moderna needs to keep doing what they are doing if you look at it from a utilitarianism perspective. They are not facing real negative consequences from any of their actions. Their company and stock is doing awesome. People are loving the development of the vaccine. Plus, executives are extremely happy with the millions of dollars they are making, along with all of the right moves.


A Kantian thinker would be a little concerned with the  executives of the company Moderna. They can have some mixed feelings however. So what is Kantianism? It is the opposite of utilitarianism when it comes to making decisions. Utilitarianism makes decisions based on consequences while Kantianism does not. Kantians base their decisions on goodwill (Salazar 21). They also value rational decision making and not manipulating people's decisions. With this in mind we can take a look at our case.

So in this case, has the company's actions been based on goodwill? I do not believe so. “Goodwill” can have different meanings for some people. Maybe it means helping others or having a friendly nature.  In terms of this case, executives are not really acting in good will. They are just selling their stocks and making themselves millions of dollars. A deed of good will would be giving away some of that money after selling to people in need during a tough time. It is not like the executives are doing anything wrong or being bad people but they are not doing their actions based on good will. They are doing it based on making money for themselves.

A kantian however would agree that the company is making  some rational decisions. They are not manipulating people with the production of the vaccine to shoot their stock up. They have not been proven to be lying or selling their stock illegally. However, one act that was not very rational or smart was a chief executive selling his stock to 0. A company executive is advised to keep a little of the company's stock so there is an incentive to make the company better. This decision was not very rational but also not the end of the world. Moderna is making rational decisions more than not. They are not lying or manipulating people. A Kantian would love this but would not believe that they are basing their actions off of good will.

Virtue Theory

The virtue theory is similar to a Kantian perspective. They both are not focused on the outcome of an action. They are focused on a person's character and how their actions reflect who they are. Moderna has shown to have many good characteristics in the Virtue Theory like honesty, justice, and intelligence. They have also not associated themselves with some vices like selfishness, greed, etc. Moderna executives are trending in the right path when it comes to Virtue Theory.

First, we can start with honesty. The company has been honest with media like CBS when it comes to questions about inside trading. They have denied the allegations multiple times saying “Executive sales are made under pre-planned 10b5-1 plans, which are executed during open trading windows in accordance with the company's insider trading policy” (CBS). Many people would ask the question of how could you trust them? They obviously would deny the allegations and would like to do so. However, different media have stated that there is no evidence against the company right now and the leader of the SEC did not even want to take a look into it. From those two things, I must believe they are telling the truth.

In terms of justice, Moderna has agreed to not make any modifications or new 10b5-1 plans until the company has submitted the vaccine for FDA approval (CBS). I would qualify this as an act of just behavior. They want to uphold that they do not participate in inside selling and this will help people show that. Lastly, Moderna has been intelligent. This one is pretty easy. They are developing and producing a vaccine that is coming out very soon. The executives have made millions of dollars of the stock of the company. Plus, they are being intelligent when it comes to accusations as they are giving people information which discredits some accusations. The company of Moderna is intelligent in general as they are capable of producing vaccines for diseases and their executives know how to make money.

Justificated Ethics Evaluation 

I believe the company of  Moderna has done a good job being professional and ethical. I think this because they have not been proved to break the law by inside selling. First off, they can do anything they want with their stocks. If an executive wants to sell 100% of his or her stock, that is their choice. There is nothing you can do about that. People are so quick to jumbo on successful people in this world and it is honestly sad. To continue, Moderna has cooperated with the media and has answered their questions. They could have just ignored them and let their legal team deal with it on the down low.  Moderna has even let people know they will not be adjusting their trade plans until the vaccine is complete. Granted they have already made millions upon millions of dollars, it says a lot as they will put the chance of making more money, to save the people. We all know people can not get enough money and I am sure they would love to make more. However, they are putting the people's interest first and want all the focus to be on the vaccine and not accusations. Moderna has done a great job with its company. Many people will call on the executives for inside selling but have no proof. What they know is how smart the executives and the people of this company are. They have made millions of dollars and are at the forefront of stopping the Covid-19 pandemic.

Action Plan

The company of Moderna does not really need a better action plan. However, I will say what I recommend to help them become more ethical and stay successfully profiting. Moderna has been accused of inside selling which puts some people on the edge. The people of this country and world are hoping for a vaccine soon, so when they hear those kinds of rumors they get nervous that the wrong people are in charge. What the company needs to do is reassure the people of this world that they are legit and not breaking the law. They should continue to release information and data proving this to be inaccurate. They need the people to trust them so when the vaccine comes, they will take it if they please. This will lead them to continue profiting. Secondly, they should continue to not change their trading plans. You do not want to bring negative attention towards the company, there will be time to change them. Right now, making the vaccine should be the number 1 priority. If they continue to do both of these things, they will continue to profit in the long run. A good relation with the people of the world will help them a ton.

If the company wants to stay ethical, they need to continue what they are doing. They must stick to their values like honesty, justice, intelligence, and build on them. Just because you may already have some characteristics, does not mean that you can acquire more. They could become more compassionate and caring for people like donating some of their money made to the people in need. They have made millions of dollars in a time of sorrow and hurt. The company can help some of the people in need, which would build their ethics. The main thing with them would be giving back a little. CEOs like Jeff Bezos have given millions of dollars during the pandemic. Moderna can give a little of their money.


Moderna as a company is doing very well. They have made millions of dollars and their stock continues to rise. Their vaccine is on the verge of distribution and they are on the forefront of getting rid of this disease. However, the company has stayed ethical despite accusations of them breaking the law. They have not been proven to be inside selling and should be considered innocent until proven guilty. The company needs to continue what they are doing in terms of business. Just continue to build relationships with the people who will be taking this vaccine which is the public. In terms of ethics, give some of that money  to communities or people in need. It will go a long way for a lot of people. People are in a tough spot and could need a pick up.


  1. Dreisbach, Tom. “'Bad Optics' Or Something More? Moderna Executives' Stock Sales Raise Concerns.” NPR, NPR, 4 Sept. 2020, 

  2. “Moderna's MRNA Technology.” Moderna, 

  3. Gandel, Stephen. “Watchdog Urges SEC to Investigate Vaccine Maker Moderna.” CBS News, CBS Interactive, 3 June 2020, 

  4. Salazar, Heather. The Business Ethics Case Manual. N.d.

  5. Branswell, Helen. “Why Experts Are Cautious about Moderna's COVID-19 Vaccine Trial.” PBS, Public Broadcasting Service, 21 May 2020, 



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