Edward Adams joined the faculty of the University of Minnesota Law School in 1992, and since then has amassed quite a résumé. He holds an endowed chair as the Howard E. Buhse Professor of Finance and Law, specializing in commercial, bankruptcy and corporate law. He has won teaching awards and written numerous books.
Those academic credentials have not helped him in his long-running battle with investors in Scio Diamond Technology Corp., a start-up company that has suffered net losses of $13 million since it went public, with Adams as chairman, in 2011. In filings with the Securities and Exchange Commission and lawsuits, shareholders have alleged that Adams has at times served as a director, officer, lawyer and stockbroker for Scio or its privately financed predecessors. One shareholder asserted in April that since 2002, Adams' brokerage and law firm have extracted at least $3.85 million from the company.
By this spring, the proxy fight had become so nasty that shareholders were highlighting Adams' day job in their SEC filings: "If put to them on an upcoming final exam, we can safely assume that even the students in the corporate law classes taught by Adams would agree that directors work for the stockholders, not the other way around …"
Adams declined to comment. He's hardly unique among faculty in holding a job outside academia. University policy says outside work can have benefits on and off campus but cautions that faculty members must declare any potential conflicts of interest and ensure that the integrity of the university is "paramount" in whatever they do.
Adams, who earns $164,487 from the university, is a practicing lawyer with his own firm, and has also been a registered securities broker.
The Scio affair is not the first time he has run afoul of his fellow investors. In 2003, he sat on the board of VirtualFund.com, a failed company that tried to refashion itself as an e-commerce firm. The Star Tribune reported that year how Adams and another board member were paid $1 million over two years by the company.
The payments were legal and despite shareholder unrest, Adams kept his seat on the board, the newspaper reported at the time.
Since 2004, Adams has sought fortune in a business founded by his father-in-law that makes diamonds. Not fake ones. Real diamonds, grown in a lab by a patented "chemical vapor deposition" process, according to Scio's website.