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To: afrayem onigwecher who wrote (10658)	11/1/2002 11:29:05 AM
From: StockDung	Read Replies (1) \| Respond to of 19428

GMXX Subscribers to Business Week on line received the following this morning; expect it to be in the magazine as early as this weekend. NOVEMBER 11, 2002 Developments to Watch Edited by Otis Port Waking Up a Sleeping Anticancer Gene When cells turn malignant, the immune system can often spot and kill them before they grow into tumors. But this sentinel system fails far too often. Geneticist and immunologist Wilfred A. Jefferies at the University of British Columbia wanted to know why. Searching for genes that are turned on and off in cancer cells, he discovered that a crucial gene is silenced in more than half of tumors--and in virtually all metastatic cancers. Its role: making a protein, dubbed TAP, that performs a key step in moving characteristic markers called antigens to the surfaces of cells. Without TAP, there are no cancer markers, so the immune system fails to spot the rogue cells. If he added an active version of the gene to tumor cells, Jefferies wondered, would the immune system then attack the cancer? His experiments in mice show that the answer is yes. When he used a modified virus to carry the TAP gene into mice with extensive small-cell lung tumors, 30% of the mice were cured. The rest showed no metastasis and lived twice as long as those without the gene. Before Jefferies can try this approach in humans, the Food & Drug Administration wants proof it is safe to insert the gene. Jefferies, now chief science officer of startup GeneMax Corp. (GMXX ) in Blaine, Wash., believes the company should be able to answer the safety questions and start clinical trials in melanoma patients within 18 months. In a forthcoming paper, he will also present data showing that adding the TAP protein can bolster the immune response to infectious agents such as HIV and smallpox. By John Carey

To: afrayem onigwecher who wrote (10658)	11/1/2002 11:30:09 AM
From: StockDung	Respond to of 19428

Before Jefferies can try this approach in humans, the Food & Drug Administration wants proof it is safe to insert the gene. Jefferies, now chief science officer of startup GeneMax Corp. (GMXX ) in Blaine, Wash., believes the company should be able to answer the safety questions and start clinical trials in melanoma patients within 18 months. In a forthcoming paper, he will also present data showing that adding the TAP protein can bolster the immune response to infectious agents such as HIV and smallpox

To: afrayem onigwecher who wrote (10658)	11/2/2002 5:00:41 PM
From: StockDung	Respond to of 19428

Federal Regulators Sue Ernst & Young By MIKE ROBINSON .c The Associated Press CHICAGO (AP) - Federal regulators say accounting giant Ernst & Young misstated the assets of a failed Chicago-area savings and loan and deliberately delayed reporting the error to the government. The allegation came Friday in a $548 million fraud and negligence lawsuit filed by the Federal Deposit Insurance Corporation. It said the accounting firm was silent about the misstated assets to avoid publicity that would hurt the $11 billion sale of its consulting arm. Ernst & Young, one of the so-called Big Four accounting firms, issued a statement blaming Superior Bank's management and a slumping economy for the collapse of the savings and loan, which was based in west suburban Oakbrook Terrace. ``Clearly, Superior Bank's failure was not caused by any action of ours and we intend to vigorously defend claims against the firm,'' it said. The lawsuit comes shortly after the Enron debacle, which brought down accounting firm Arthur Andersen LLP. Andersen was found guilty in June of obstructing justice for its handling of Enron documents. Andersen is now a shell of its former self. The FDIC cited repeated warnings from industry experts that mixing auditing with business consulting can result in conflicts of interest. ``E&Y's misconduct was exacerbated by rampant conflicts of interest in the valuation of Superior's assets,'' the lawsuit said. Federal regulators seized Superior in July 2001. The thrift was the biggest insured U.S. financial institution to fail in nearly a decade. The lawsuit said the cost to the FDIC of paying depositors was $750 million. Superior had lost millions of dollars on risky home loans to borrowers with tarnished credit. In January 2001, after lengthy denials, Ernst & Young acknowledged that Superior's assets had been overstated by $270 million, according to the lawsuit. It said further investigation showed the thrift's assets had to be lowered by an additional $150 million. The complaint outlined ``a long history of breaching duties owed to the FDIC and other regulatory agencies'' on the part of Ernst & Young. It said the firm paid $400 million and signed a cease-and-desist order stemming from ``improper audit practice with regard to some of the most notorious failed financial institutions of the 1980s savings and loan crisis.'' The cease and desist order appeared to have ``little or no impact on E&Y's behavior'' and the firm soon began ``improperly accounting for Superior's assets,'' according to the complaint. The bulk of Superior's earnings came from the sale of bonds secured by highly volatile subprime mortgages, and Ernst & Young should have been especially careful and exercised ``professional skepticism'' because of the high risk, the lawsuit said. Ernst & Young, however, was negotiating to sell its consulting arm to a French firm, Cap Gemini, the lawsuit said. It said the consulting arm was valued internally by Ernst & Young at $4.7 billion but the projected sale price was $11 billion. ``Disclosure of its wrongful accounting at Superior would have triggered widespread media coverage, additional investigation of E&Y's practices and would have placed the sale and its windfall in jeopardy,'' the lawsuit said. The FDIC pointed the finger at Ernst & Young's top executives, saying they knew what was happening at its Chicago office with regard to Superior. ``E&Y's fraud went to the highest level of E&Y - it's national office in New York City,'' the lawsuit said. The Chicago-based Pritzker family and their equal partner in Superior, New York developer Alvin Dworman, admitted no liability in Superior's failure, and no sanctions were imposed on them in the agreement with the FDIC and the Office of Thrift Supervision. The Pritzkers paid $400 million in December in return for a guarantee that the government would not sue or fine them in connection with Superior. Arthur Bowman, editor of the Atlanta-based Bowman's Accounting Report, said he didn't necessarily see the case as portending anything broader involving S&Ls or accounting. ``It's an isolated case as far as I know,'' he said. ``I don't know of any other big S&Ls failing. We know of no other areas where the FDIC's beating some drums.'' 11/02/02 02:40 EST

To: afrayem onigwecher who wrote (10658)	11/2/2002 7:21:46 PM
From: StockDung	Read Replies (1) \| Respond to of 19428

Ex-Merrill broker wins judgment Don Bauder November 2, 2002 As San Diego investors continue to pursue arbitration claims against Dean L. Welsh and his former employer, Merrill Lynch, Welsh has notched one victory: He has won a $200,000 arbitration judgment against Merrill Lynch. In February of this year, I reported in two separate columns that a number of investors were going into arbitration against Welsh and Merrill Lynch, largely because he allegedly executed trades without the investors' permission, put them in margin accounts without explaining what margin meant, and also put them into unsuitable, speculative stocks. The major stock was Fremont-based Mattson Technology. Welsh was in love with that stock – so much so that he bought a new Porsche with the vanity plates, "THXMTSN," or "Thanks Mattson." After hitting $46.36 a share in May 2000, the stock went downhill. It closed yesterday at $2.28, up 28 cents. Merrill fired Welsh in September 2001, only nine days after 9/11, when the market was in turmoil. Merrill's records indicate Welsh was "terminated after the firm learned that he exercised discretion in several clients' accounts without the necessary power of attorney on file." Welsh filed for arbitration against the big firm. Welsh's attorney, Erwin J. Shustak, says that a new manager in Merrill's Carlsbad office fired Welsh so that he could distribute Welsh's clients to other brokers at the office. "All customer complaints arose after Welsh was terminated and the brokers and branch manager stirred the pot by contacting Welsh's former clients, denigrating Welsh and criticizing the manner in which Welsh handled their accounts," says Shustak. Then, Merrill lawyers threatened to sue Welsh if he attempted to contact his former clients, says Shustak. Among other things, Welsh said he had been wrongfully terminated, Merrill had put defamatory information into his personnel file and had recklessly inflicted emotional distress upon him. He was awarded $200,000. Says Mark Herr, a Merrill spokesman in New York, "Clearly we are disappointed in the arbitration panel's ruling, but Mr. Welsh had sought in excess of $2 million plus punitive damages, so to award $200,000 is a recognition his claims weren't as much as he made them out to be." San Diego attorneys are going ahead with their arbitrations. James Krause is pressing ahead on behalf of four investors with complaints. "None of our clients were called as witnesses," says Krause. "How can arbitrators find that Welsh had not done unauthorized trades without talking to customers? I represent a lady in her 80s in a wheelchair, and (Welsh) did all kinds of trades for her, and never called her." The woman would have testified, says Krause. "Until Merrill Lynch and Dean Welsh give us the entire files relating to Welsh's arbitration against Merrill Lynch, we do not know how it will affect the case," says attorney Jeffrey P. Lendrum, who represents three individuals who lost heavily in Mattson stock. "We're pursuing Mr. Welsh and Merrill Lynch in connection with massive unauthorized trading in Mattson and other stocks," says attorney Bradd Milove, who has two cases. "The claims also arise from unauthorized institution of huge margin debt balances." Michael McColloch, a Carlsbad attorney who represents Welsh in the arbitrations, says his client is now employed, but not in the securities industry. As to Welsh's emotional state, "he's doing his best to get on with his life," says McColloch. The lawyer says that Welsh's actions with Merrill Lynch were appropriate, and he is fighting the arbitration claims. "Mr. Welsh's arbitration against Merrill Lynch is vindication of Mr. Welsh and the correctness of the actions that he took," says McColloch. -------------------------------------------------------------------------------- Don Bauder: (619) 293-1523; don.bauder@uniontrib.com