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Cel-Sci: Hoax Release Carried on News Wire
biz.yahoo.com
Tuesday June 11, 7:58 pm Eastern Time
Reuters Business Report
By Andrea Orr
PALO ALTO, Calif. (Reuters) - Biotechnology company Cel-Sci Corp. (AMEX:CVM - News) on Tuesday said it had become the victim of a hoax when a news wire carried a false press release stating that it was working on a potential cancer cure.
The phony release did not cause a significant move in its stock and Cel-Sci said it appeared most investors had not believed the item, which ran for several hours Monday on the online news wire, Internet wire, and briefly on Yahoo! Inc's (NasdaqNM:YHOO - News) Finance Web site.
Still, the incident raised fresh concerns over whether tighter safeguards had been put in place to prevent fictitious and potentially damaging news about publicly traded companies from being widely disseminated.
Two years ago Internet Wire -- which carries corporate news releases as a source for other news outlets -- published a false release that about the earnings of data networking equipment maker Emulex Corp. (NasdaqNM:EMLX - News). That news was picked up by more mainstream news outlets including Bloomberg and Dow Jones and caused Emulex stock to fall by more than 50 percent.
Aside from Yahoo Finance, no other news outlets picked up the Cel-Sci release from Internet Wire on Monday.
Cel-Sci and Internet Wire both said Tuesday they had no information on the source of the phony press release, and were cooperating with the Securities and Exchange Commission in investigating the matter.
The phony release, which was issued before the market opened on Monday, said that Cel-Sci had partnered with Takeda Chemical Industries Ltd. (Tokyo:4502.T - News) to commercialize a "potential cancer cure."
"It would be nice if it were true, but there is no such deal," a Cel-Sci spokesman said.
The spokesman said Cel-Sci, which is working on developing cancer treatments, has no relationship with Takeda and said it was never contacted by Internet Wire to verify the contents of the release before it was published.
Internet Wire's Chief Executive Jim McGovern said it has safeguards in place to prevent false news from being published, but that those steps were not followed over the weekend, when the false news about Cel-Sci was received.
Cel-Sci shares fell two cents on Tuesday to close at 30 cents per share, not far from their 52-week low of 27 cents. Its high point in the past year was $1.94. |
