An older Bloomberg article by David Evans which is worth memorializing here since it contains information not in the corresponding SEC litigation release:
Ives Health, CEO Charged With Fraud for HIV Drug, T-Factor
By David Evans
New York, July 30 (Bloomberg) -- Ives Health Co. and its founder Keith Ives were indicted by a federal grand jury for fraud in the sale of T-Factor, an AIDS drug marketed by the nutritional supplement maker over the Internet without the approval of the Food and Drug Administration.
Ives, 44, Chief Executive Michael Harrison, 46, and the company were also charged with fraud in a civil complaint by the Securities and Exchange Commission.
The SEC and the grand jury charged the company used a fabricated study called ``The Java Project'' to promote sales of T- Factor as an AIDS treatment. Shares of the Claremore, Oklahoma- based company soared more than seven-fold in February after it said The Java Project had found the drug to be effective.
``The defendants used the Internet to disseminate false press releases concerning T-Factor, along with Internet bulletin board postings and a Web site, in order to pump up the price of Ives Health Stock,'' the SEC said.
A former company employee, Robert Badeen, created the study, the complaint said. In an interview with Bloomberg News in March, Badeen said he wasn't a doctor, as the company had said. He also said Ives had misrepresented the efficacy of the drug. The name Java Project stems from Badeen's claim to have conducted the study in Indonesia. Badeen wasn't charged in the civil or criminal actions.
Press Releases
Jack Schisler, an assistant federal public defender in Oklahoma City who is representing Ives against the criminal charges in U.S. District Court in New York, declined comment. Schilser is representing Ives because he lives in Oklahoma. Attorneys representing the other defendants weren't immediately available to comment.
The SEC complaint also alleged that James Kosta, 26, of Reno, Nevada, earned more than $400,000 selling the shares while he encouraged investors to buy the stock.
Kosta allegedly was hired by the company to issue press releases promoting T-Factor and, using the name InsideAnalyst, posted 190 messages on Raging Bull's Internet site recommending Ives stock during the month of February.
``As InsideAnalyst, Kosta never disclosed his sales, and pretended to be interested in buying more Ives Health stock,'' according to the SEC complaint.
bloomberg.com
Thanks to Peter C for bringing this article to SI's attention ( #reply-16326303 ). |
