Rock Creek Pharmaceuticals Inc. (fka RCPIQ)

[NukeJohn]

Do these tactics sound familiar?

Here is a Washington Post article exposing how short sellers game the system and harm Biotech companies. These tactics stifle innovation and harm the economy. It's worth every investor's time to read the links posted here and perhaps even write letters to the regulatory agencies (SEC and FDA) and to your Congressman.

These tactics have finally been exposed by the Washington Post in this article (linked below). Maybe this author might wish to learn about what has happened to Rock Creek Pharmaceuticals (or perhaps he already has an idea). Maybe a few emails will get him to do an investigation on what has happened to RCPI.

http://www.washingtonpost.com/business/northwest-biotherapeutics-stock-woes-highlight-the-harm-of-short-sales/2014/09/26/78b99b0a-4507-11e4-b47c-f5889e061e5f_story.html

excerpts....

I’m talking, of course, about the “shorts” — investors who actively bet against companies by borrowing shares of their stock and selling them in the hope that the price will go down and they can buy them back at a lower price before returning the shares to their rightful owner. In theory, short-selling enhances the efficiency of markets by bringing in fresh information and capital. In reality, it has contributed to turning financial markets into a giant casino which is easily rigged for the benefit of insiders.

Biotech stocks are particularly vulnerable to manipulation by the shorts. They tend to be small, with low share prices and relatively few shares actively traded. And because of the high risk involved — relatively few biotech companies ever succeed — share prices tend to be volatile, easily moved by rumors and news of regulatory action.

These characteristics make it easy for a handful of hedge funds to anonymously drive down the price by selling borrowed shares into the market at the same time, creating a self-fulfilling momentum that scares off other investors. Even when they can’t get ahold of enough borrowed shares, they might sell the shares anyway and simply fail to deliver them three days later when they are due. That’s known as a “naked” short, and it’s illegal.

The shorts’ tactics, however, extend well beyond the trading room. As the nonprofit advocacy group Citizens for Responsibility and Ethics in Washington (CREW) lays out in a recent white paper, shorts are active in anonymously feeding false and misleading information about their target companies to friendly analysts and bloggers while using social media to attack the intelligence and motives of those who view the company favorably. They enlist plaintiffs law firms to issue press releases soliciting shareholders to sue the target companies for securities fraud. And they pepper regulators with threatening letters and fillings demanding that they investigate their targets or deny them product approvals.

Such tactics make it difficult and expensive for biotech firms to raise the large amounts of capital they need to conduct drug trials and build production facilities. They were all used in recent years to cripple Dendreon, another company that is a pioneer in the use of immune therapy for cancer treatment, which was so weakened by the shorts that it has failed to recover even after receiving its much-delayed FDA approval. And now they are after Northwest Bio.

As you can see from the accompanying chart, anytime the price of the company’s shares began to rise this year, it was hit with another wave of short sales that drove the price back down. By the end of last week, the total number of borrowed shares was reported to be about 8.5 million, or about 30 percent of the shares not held by company executives or entities they control. That level of short interest is unusual. It’s also suspicious — so much so that at one point this summer, shareholders could earn a 34 percent return by lending their stock to the shorts just for one month. Based on filings by brokerage firms, Northwest Bio estimates that, in addition to the 8.5 million reported short shares, there are as many as 4 million short “phantom” shares created by the “naked” transactions.

Here is the letter to the SEC from CREW. Do you recognize any names?

http://www.citizensforethics.org/page/-/PDFs/Legal/Investigation/7-29-14_SEC_Feuerstein_Letter.pdf?nocdn=1

Here are the supporting exhibits to the CREW Letter to the SEC.

http://www.citizensforethics.org/page/-/PDFs/Legal/Investigation/7-29-14_SEC_Feuerstein_Investigation_Exhibits.pdf?nocdn=1

IMHO, the noose is tightening around those that are manipulating share prices via illegal naked short selling. In the case of Rock Creek Pharmaceuticals, it shouldn't take a lot of buying to make the shorts run for cover. Now that the big pharmas know what Rock Creek Pharmaceuticals has discovered, they might want to start taking a passive ownership position (or even a possible buyout). If someone wanted to take a 5-10 million share position, I doubt the shorts could hold it below $1.00.

JMHO,

NJ