On October 12, 1998, an Asensio & Company, Inc. official notified the now-departing Chairman of the American Stock Exchange (“AMEX”), Richard F. Syron, that the firm had material information concerning the Hemispherx Biopharma, Inc. (AMEX: HEB) (Price: $7.625) fraudulent stock promotion. James F. Duffy, executive vice president and general counsel to the AMEX, responded on November 17th that the exchange cannot engage in public discussion or debate with market participants regarding regulatory matters, and wrote that he required “harder” evidence.
Asensio & Company provided Mr. Syron with a 107-point compilation of Hemispherx’s false and/or misleading investor representations, plus a three-inches-thick, bound volume with colored and numbered tabs. Each tab contains an SEC filing, a medical study, a chronic-fatigue-syndrome prevalence study, related HEB safety-and-efficacy claims for Ampligen, or another document related to a false claim made by Hemispherx. The binder is indexed by each such Hemispherx statement and its refuting documents. These documents include an October 15, 1998 FDA violation notice issued to Hemispherx’s CEO, Dr. William Carter. This notice instructs Hemispherx to discontinue immediately the dissemination of materials that make claims of safety or efficacy for Ampligen. The FDA notice proves that Hemispherx’s safety-and-efficacy claims, which are the basis of its fraudulent stock promotion, violate federal drug laws. The body of submitted evidence proves that Hemispherx is little more than a vehicle for its promoters, including certain AMEX members, to profit from HEB’s grossly overvalued stock. Neither Mr. Duffy nor Mr. Syron ever responded to this “hard” evidence.
On June 1, Mr. Syron will leave his post at the AMEX to become the CEO of Thermo Electron Corporation (NYSE: TMO), where he has been a board member since 1997. TMO owned 40,000 shares of HEB. The Thermo “family of companies” includes 22 subsidiaries that are individually listed on the AMEX. The specialist for all 22 subsidiaries is GHM Inc. (“GHM”). GHM is also the specialist for HEB. A principal in GHM, Mr. Joseph Giamanco, was offered and privately purchased 250,000 shares of HEB before its 1995 initial public offering and subsequent AMEX listing.
The Hemispherx fraudulent stock promotion requires pervasive HEB insider skepticism about the AMEX’s willingness to commence an enforcement action. Mr. Syron has, or should have, direct personal knowledge of the HEB stock promotion and TMO’s and GHM’s dealings with HEB. As Chairman of the AMEX he has a duty to act impartially and be willing to commence an enforcement action against HEB.
Short selling involves a risk not associated with the purchase of stock including, but not only limited to, unlimited loss and stock borrowing risks. Additional information is available upon request.