AMEX failed to close down Hemispherx’s warrant fraud.

On November 5, 2001 Hemispherx Biopharma, Inc. (AMEX: HEB) (Price: $4.99) announced it had extended the expiration date for its warrants to November 21, 2001, “due to difficulties being experienced by the global investment community.” The American Stock Exchange (“AMEX”) suspended trading on the warrants on their expiration date. As a result of the AMEX’s trading suspension, Hemispherx warrants ceased trading. On November 14, 2001, twelve days after the AMEX suspended trading, Hemispherx disclosed in a quarterly filing with the Securities and Exchange Commission (“SEC”) that it had received $5.7 million from the exercise of warrants.

Hemispherx had already extended the expiration date for these warrants once from November 2, 2000 to November 2, 2001. The AMEX allowed the warrants and the underlying shares to continue to trade despite the fact that Hemispherx has repeatedly issued throughout its 6 years as a public company false positive statements that have effected its stock price. Hemispherx insiders have also repeatedly sold shares to unwitting investors. The AMEX’s failure to regulate Hemispherx has led to a U.S. Congressional investigation of its listing requirements and an investigation by the U.S. General Accounting Office (“GAO”). The GAO’s report on the AMEX is due to be available to the public in late December.

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