09/23/2003 article
Biotech exec's SEC case cloaked in mystery
Atlantan won't comment, cites 'national security'
By DAVID McNAUGHTON
The Atlanta Journal-Constitution
Timothy C. Moses doesn't have much to say about his recent troubles with the Securities and Exchange Commission, but his reason for not commenting is an eye-opener.
"National security," he said. As in the FBI and the CIA.
"We deal in that arena where we can't discuss it," Moses said when questioned recently by a reporter about the SEC case.
They ordered you not to talk?
"Yes."
Both agencies?
"Yes."
They invoked some kind of national security?
"Yes."
They said, "Tim, you can't say anything about this because it's a matter of national security?"
"Not those exact words."
A little background: Timothy C. Moses is a 46-year-old Atlantan who agreed to repay $11,600 in profits from stock sales after the SEC accused him of using words to mislead investors in an obscure, publicly traded company, International BioChemical Industries. Moses is chief executive of the company, whose stock now trades for a penny or less.
In settling the case with the SEC, which is still deciding whether to pursue a civil penalty, Moses neither admitted nor denied the allegations.
But that case -- and how Moses chooses his words -- illustrates the difficulty in determining what's truth or fiction these days at International BioChemical, which sells a mold killer. Even something as simple as holding a shareholders meeting seems elusive for the company once known as BioShield Technologies.
The company's problems came to light early this year over some announcements Moses issued publicly -- in the form of press releases.
In late January and early February, International BioChemical issued a series of press releases that got the SEC's attention. In one, dated Jan. 29, the company "announced that a Federal Government Agency has requested today an urgent meeting with the firm to discuss the BioShield line of products in the war on bioterrorism."
Thirty-nine minutes after that announcement was made, International BioChemical shares had nearly tripled, to 7 cents, according to the SEC. Trading volume, which had been less than half a million shares daily for much of January, soared to more than 22 million shares the next day, when the company put out a similarly worded press release titled "Government Sets Parameters Yesterday Afternoon for Discussion of Combating Bio-Terrorism."
Then, as the trading volume and price of the company's stock rose following those announcements, Moses sold 1.2 million shares of International Biochemical, according to the SEC.
The SEC sued in U.S. District Court in Atlanta, alleging Moses issued false and misleading announcements that suggested the federal government wanted to buy products or services from the company to fight terrorism. It turns out the FBI had contacted the company, but not to buy anything, according to the SEC.
Instead, the FBI contacted Moses' company as part of its national investigation into the deadly anthrax mailings of 2001, the SEC said. What led the FBI to International BioChemical is unclear.
"All we're going to have to say is that the FBI does not have a business relationship with Mr. Moses or his company," says FBI Special Agent Joe Parris in Atlanta.
Different versions
Moses' interpretation of the government's interest was and is a little different from that of the SEC. He shared it early last month, when a reporter caught up with him on the day the company's shareholder meeting was to have been held.
"I'm saying that they were there to discuss our products," said Moses from his nondescript offices in a north Fulton County office park.
So you're saying those press releases were accurate?
"I'm saying those press releases, to the best of our belief, were appropriate."
His lawyer, in a brief filed in the SEC case, put it this way: The press releases were not misleading, but even if they were, they amounted to nothing more than "expressions of immaterial corporate optimism or puffery."
Little else is known about Moses. He also founded Nova BioGenetics, another small, publicly traded Atlanta company that is described in press releases as International BioChemical's distributor. Previous SEC filings describe him as a former employee of Dow Corning and subsequent founder of a company called DCI Inc.
Those documents also report that he graduated from "a division of Georgia Institute of Technology where he received his B.S. degree in 1980." Southern Polytechnic State University in Marietta, once a division of Georgia Tech, said a Timothy C. Moses graduated in 1980. According to Southern Tech, the degree was a bachelor of architectural engineering technology.
Financial trouble
Documents filed with the SEC by International BioChemical also show the company has had trouble paying its bills, with several judgments against the company for nonpayment.
And what about the special shareholders meeting, scheduled for Aug. 8 at a Roswell hotel? It never came off.
A room at the Best Western Roswell Suites had been readied for the meeting of International BioChemical's shareholders. But 17 minutes before it was to start, a stock market information firm called Knobias reported it had been postponed.
Moses said the meeting was not held because the company was waiting for comments from the SEC. The only thing on the meeting agenda was a reverse stock split vote.
There have been no further pronouncements by the company.
The best weapon against "fear" is "facts"!!
