7:52 P.M. June 2, 2000
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Medizone Seeks Rule Changes To Regulate Market Makers
By Jack Burney
06/02/2000 06:40 AM CST
Medizone International, Inc. (OTCBB: MZEI) announced a potential cure for Hepatits C and perhaps for AIDS, plus the infusion of the capital needed to prove it in a multi-site scientific study ? and its stock price drops!
That?s enough to lead CEO Edward Marshall to call in the attorneys. Blaming ?two or three market makers? for suppressing the stock price to protect a short position of ?millions of shares,? Marshall urged shareholders to have stock registered in their names and prohibit its use as collateral for market maker short positions. So far, owners of more than 2-million shares have promised to do so.
After the original report of the possible cure, MZEI stock shot up from the neighborhood of $0.42 to as high as $0.7350, but then dipped, inexplicably, and closed at a last minute last trade figure of $0.49 Thursday, ?and not on profit-taking.? And that has Marshall fighting mad.
?We?re not going to sue anybody,? Marshall said. ?We don?t know for sure who is doing this, because MMs are not required to report their short positions on OTCBB stocks, as they must for NASDAQ, NYSE, and AMEX stocks.?
Marshall?s attorney team, which includes respected top level legal talent, working pro bono some say, will instead codify MM violations and regulatory negligence into a legal brief , and take the evidence of wrong-doing to SEC and NASD officials, as well as sympathetic congressional figures.
The objective is SEC and NASD rule changes that will force full disclosure of market maker activity in OTCBB stocks by MMs, including their short positions, plus a limit of 10% on the short positions any MM is allowed to hold in such stocks. It may require Congress to act. The legal brief should be completed by the end of the month.
Marshall believes a few market makers are holding short positions in his stock in the millions of shares. ?There is no other explanation. They are greedily using our 8,500 stockholders to seek a massive profit, and doing so illegally, but they are hard to catch because they don?t have to report.?
But the market makers involved may have seriously miscalculated when they took their massive short positions in Medizone stock, Marshall said.
?We have major stockholders who bought at $2 in 1986, and have held through difficult times,? he told OTC News Network. ?Very few will abandon the stock now, because they aren?t in it just for the money. They believe our patented science will solve one of the world?s gravest medical problems.?
The CEO?s fury over the situation overshadowed the good news. Marshall reported to about 50 stockholders at the annual meeting this week in Sausalito, CA, that Medizone?s ozone therapy is fully protected by three existing patents and another filed in May on generation equipment, various controls, conversion of ozone to O2, applications and treatment envelopes, with everything overlapping and intertwining.
The protection extends to most of the world, including UK, Australia, Philippines, Hong Kong, Switzerland, Spain, Portugal, Sweden, the International Patent Corp. treaty, Netherlands, Luxembourg, Malaysia, Italy, Monaco, Japan, Lichtenstein, Germany. Greece, Ireland, France Finland, EU Patent Office, Canada, Cypress, Denmark, Austria, and Belgium.
Medizone will construct a manufacturing facility, Marshall told happy stockholders, for the generator which mixes the ozone and oxygen with required precision.
?It should be up and running by the third quarter of 2001, he said. ?We are hiring a projector director by next September to get the job done. We should have sufficient data on the efficacy of the treatment of Hepatitis C ? and perhaps HIV ? by next summer, and we anticipate that orders will begin coming in then.?
Previously, Medizone reported $10 million in capital within virtually unlimited follow-on funds from Groundell Foundation, and an agreement to conduct the necessary random double-blind study of the therapy under the auspices of Health Canada, Canada?s equivalent of the U.S. FDA. |
