Short-Seller Asensio Accused of Manipulating Hemispherx Stock
Took Huge Short Position, Aggressively Publicized Misinformation to Defraud Investors
NEW YORK, Oct. 1 /PRNewswire/ -- Hemispherx Biopharma (Amex: HEB - news) today filed lawsuits in federal court naming Asensio and Company, its agents, and certain other parties as co-conspirators in a scheme to manipulate the Hemispherx stock price and defraud Hemispherx investors.
Papers that Hemispherx filed today in Eastern District Federal Court of Pennsylvania in Philadelphia allege that Asensio & Company and its co-conspirators established short positions of more than 2 million shares, then pursued an aggressive media, federal mail and Internet campaign to disseminate false and misleading information intended to drive down the Hemispherx share price and to create profits on the short sellers' positions. The suit estimates that the profits that Asensio & Company and its co-conspirators stood to make through their scheme was greater than $25 million based on their publicly stated target of driving the Hemispherx share price from its peak of about $13 per share to below $1.
The lawsuit seeks to recover the $320 million in value lost by Hemispherx shareholders as a result of Asensio & Company's activities, plus punitive damages.
As part of the scheme, the co-conspirators allegedly formed fraudulent brokerage clients and phantom accounts in the U.S. and in foreign countries in an attempt to mask their illegal trading activities and to evade U.S. taxes. Most of these allegedly fraudulent operations publicized different names and phone numbers for their trading operations but resided at the same Asensio & Company-related address.
Since Asensio & Company launched its alleged ``bear raid,'' a number of leading medical researchers have strongly criticized the false and misleading information that Asensio & Company has disseminated related to Hemispherx Biopharma's drug Ampligen, which is being developed for the treatment of Chronic Fatigue and Immune Deficiency Syndrome (CFIDS).
For example, the law suit filed today alleges that Asensio & Company knowingly disseminated outdated figures on CFIDS incidence to present a fraudulent case to investors for the market for Hemispherx's products. According to the latest authoritative research on CFIDS incidence, an independent study published in Annals of Internal Medicine shows that the incidence of Chronic Fatigue and Immune Dysfunction Syndrome (CFIDS) is up to 20 times greater than the numbers in outdated studies cited by Asensio & Company. The suit alleges that Asensio & Company knowingly ignored these data, which imply that between 500,000 Americans and 2,000,000 people worldwide suffer from Chronic Fatigue Syndrome, and chose instead to disseminate outdated research from the early 1990s from the Centers for Disease Control (CDC) that estimated U.S. adult incidence at only 26,000. In Congressional testimony in 1995, the Centers for Disease Control indicated that the prior CDC reports had significantly underestimated the prevalence of Chronic Fatigue Syndrome in the U.S. and that the Annals of Internal Medicine estimates were more indicative of the actual incidence.
The suit alleges that Asensio & Company knowingly disseminated similarly outdated or incorrect misinformation on the efficacy and toxicity of Ampligen and on the clinical testing status of Ampligen under Food and Drug Administration regulations. Leading medical researchers from the U.S. and Europe, and clinical experts on CFIDS treatment have strongly criticized the inaccuracy and misleading nature of the reports issued by Asensio & Company and its co-conspirators.
Defendant Manuel P. Asensio has been named in other securities-related lawsuits and regulatory actions.
A detailed playback of the recent teleconferences in which medical experts provide corrections to the Asensio & Company misinformation campaign can be obtained by calling in the United States: 800-475-6701 and requesting access code #408590; supplemental information can be obtained by requesting access code #407448. International callers may dial 320-365-3844 and request the same access codes as U.S. dialers.
SOURCE: Hemispherx Biopharma, Inc.