BUSINESS/FINANCIAL DESK
Whoever bought this stock will certainly be upset in 6 months. This stock is no different than the other 9,999 out of 10,000 penny stocks. If you think it is, you are very naive. I'll admit, I'm not 100% sure, but I have reason to believe that David Blech financed the $1.2mil loan purportedly under auspices of Nexim Bank. The Nexim bank financed the loan, but Blech put up significant collateral. Not only did the company partially re-pay Blech for his collateral, but Blech of course recieved hundreds of millions of shares to dump in the last month. Becasue the company paid back Blech most of his collateral for the $1.2mil loan that will never be repaid, the company was able to post legitimate news to pump the price up before the big approval. This allowed the insiders to dump most of their shares at or near $.10 so Pandey can purchase more rental properties in NJ. Good night and good luck to all.
Financier Faces Fraud Charges
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(By Bloomberg News) 259 words
Published: July 2, 1999
David Blech, the former biotechnology financier, was charged yesterday by the Securities and Exchange Commission with defrauding investors and brokerage firms of $22.5 million by manipulating 10 stocks.
The S.E.C. has reached a settlement in principle with Mr. Blech, who previously pleaded guilty to criminal securities fraud and filed for bankruptcy protection, said Mr. Blech's lawyer, Andrew Levander. Mr. Levander would not disclose the terms of the settlement.
Mr. Blech has less than $1 million in assets and faces potentially large claims stemming from a class-action lawsuit, Mr. Levander said. Four other people, including three former employees at Mr. Blech's defunct firm, D. Blech & Company, were charged with manipulation yesterday by the S.E.C.
The commission's lawsuit, filed in United States District Court in Manhattan, contends that Mr. Blech contrived trades in 1994 to avoid a request by Bear, Stearns & Company, which was processing his firm's trades, that he liquidate money-losing stocks that were pledged as collateral. Mr. Blech had put up the collateral to obtain credit from Bear, Stearns, according to the suit.
Instead of selling the stocks, Mr. Blech transferred them from his firm to accounts at other brokerage firms and to investor accounts in his own firm to persuade Bear, Stearns that he was reducing his stock holdings, the suit said.
The S.E.C. contends that Mr. Blech continued to manipulate stocks from November 1997 to January 1998 even as he was agreeing to plead guilty to criminal fraud.
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