I want to clarify "You didn't understand the post".
You said "I highly doubt they'd lie to the court" and "I don't see them lying to the court".
I never said that Sullivan lied to the court. Please don't let what you perceive to be a bias on my part lead you to misrepresent my statements.
"it's obvious that those two were well aware of Cellceutix if they held shares"
Of course it is. I never suggested otherwise.
"He was also one of the founding shareholders...."
That's part of my minor criticism of the Sullivan statement in his motion. The phrase "founding shareholder" is virtually unknown in reference to domestic public companies and has little meaning...see if you can find a definition of the term being applied to a US public company.
You said "The website even states Dr Frei was a founding member"
Obviously you decided that finishing the sentence wouldn't fit your purpose:
...."of our Advisory Board until his passing in 2013."
I did a little research based on your "Best guess would have something to do with the merger or acquisition in 2008 requiring a transfer of shares between transfer agents" and that is probably a pretty close guess. The fact that the issuance dates on the exhibits were both 12/7/07 and the merger dates centered around the period from 12/6 to 12/12 of that year suggest that the two each held 300,038 shares at the time of the merger...I'm putting the issue of whether they were purchased or provided as compensation at the end of this post.(Perhaps they could be considered "original shareholders" based on that fact. Please don't consider the distinction between that phrase and "founding shareholders" mere semantics. One of those phrases has no clear legal definition.)
But now we're getting to the REAL point of my original post, which was that Sullivan could have refuted the statement that Rosen made in Paragraph 55 of his SAC much more clearly, directly and simply than he did.
The relevant excerpt:
"Additional false statements intended to inflate the value of Cellceutix stock also appeared on the Company’s website in 2008, when the Company falsely claimed that two prominent scientists, Dr. Emil Frei, director and physician-in-chief emeritus at the Dana Farber Cancer Institute, and Har Gobind Khorana, a 1968 Nobel Prize winner, were scientific advisors for Cellceutix."
Rosen's basis for that allegation was a India New England article...in the same way that a number of his other allegations have the Mako blog as their sole source.
I guess Sullivan may have felt that asserting a connection between the scientists and the company was better accomplished via the theoretically independent records of the transfer agent even if they didn't DIRECTLY refute the allegedly false statement that they were "scientific advisors". The fact is, prior to when the assertion that they were scientific advisors appeared on the website, it appeared in the company filings. Specifically the same Form 8-K that reported the merger shows the following:
The Company has established a Scientific Advisory Board consisting of:
Emil Frei III, MD Dr. Frei is one of the world’s leading oncologists, a pioneer of chemotherapy and a leader in medical research, clinical practice and education. His distinguished career includes 40 years in top leadership positions such as Chief of Medicine at National Cancer Institute, Associate Scientific Director at M. D. Anderson, and Director and Physician-in-Chief at the Dana-Farber Cancer Institute. He continues as Physician-in-Chief, Emeritus, at Dana-Farber.
Har Gobind Khorana, PhD Dr. Khorana is a Nobel Laureate and has won many other awards and honors for his achievements. He was elected a member of the National Academy of Sciences, Washington as well as a Fellow of the American Association for the Advancement of Science. In 1971 he became a foreign member of USSR Academy of Sciences and in 1974 an Honorary Fellow of the Indian Chemical Society. Dr. Khorana’s work is an important scientific landmark of the twentieth century.
Rosen doesn't cite that filing in his allegation, but I'm surprised that Sullivan doesn't cite it in his motion. It's clearly on point.
Finally on the side issue of the source of the 300,038 shares each I felt that they likely represented compensation versus coincidentally identical purchases based on the fact that they were restricted shares in identical amounts. However, the same filing in which they were described as the company's Scientific Advisory Board says this immediately below that listing:
"At this time, members of the Scientific Advisory Board receive no remuneration for their services, nor does the Company reimburse members of the Scientific Advisory Board for expenses incurred in their service. The Company is considering providing compensation for the members of the Scientific Advisory Board, but has made no decisions as of this time."
If in the future you feel that I'm accusing someone of lying I'd appreciate it if you would read the post a second time to be sure. If you still do, I'd appreciate the opportunity to confirm that to have been my intent. In this case it clearly was not.
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