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To: Jeffrey S. Mitchell who wrote (4004)	1/2/2003 3:47:17 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 1/2/03 - [MXON] Tulsa, Okla.-Based Medical Syringe Developer Maxxon Inc. Blasts SEC Tulsa, Okla.-Based Medical Syringe Developer Maxxon Inc. Blasts SEC Jan 02, 2003 (Tulsa World - Knight Ridder/Tribune Business News via COMTEX) -- An attorney for Maxxon Inc. calls fraud allegations made by the Securities and Exchange Commission against the medical syringe developer a "knee-jerk reaction" and "overreaction." "This lawsuit is an effort to justify an investigation that has dragged on for four years, and it's taken up a great deal of the SEC's resources, which clearly could have been used better elsewhere," said Ronald Kaufman, a Tulsa attorney representing Tulsa-based Maxxon. On Monday, the SEC filed a civil injunction action in U.S. District Court in Tulsa against Maxxon, its president and chief executive officer Gifford M. Mabie Jr., and two other company officials -- Dr. Thomas R. Coughlin Jr. and Rhonda R. Vincent. The company, which has 20 days to respond to the SEC's allegations, probably will file a motion to dismiss the complaint, Kaufman said Tuesday during a call from Florida. Maxxon is a start-up company that has a license to develop and market a syringe with a retractable needle to reduce the incidence of needle-stick injuries among health-care workers. The SEC's complaint alleges that from at least 1997 through 1999, Maxxon and Mabie made materially false or misleading statements on television, in press releases, on the Internet and in other media. The statements helped inflate the price of Maxxon stock, which the defendants then sold at inflated prices, the SEC alleges. The complaint alleges that between Jan. 8, 1998, and Jan. 28, 1999, Mabie said on six television shows in California and in one nationwide conference call with brokers that the syringe could be produced for the same cost as a standard syringe. That was contrary to what consultants had informed him, the SEC says. "We have actual documents to back up what Mr. Mabie said. The SEC also has those documents," Kaufman said. He added that the company in good faith believes it can produce the syringe at the same cost as a standard syringe, and that the device probably will save millions of lives. He called the SEC's claims about a Food and Drug Administration licensing process "laughable." The SEC's complaint alleges that from Feb. 20 through July of this year, Maxxon, Mabie and Coughlin made false or misleading statements in press releases concerning the status of Maxxon's 510(k) application with the FDA to approve a new version of its syringe. Kaufman, however, countered that the FDA has supported Maxxon's statements. "The FDA has come forward and said those statements are accurate," Kaufman said. "The SEC may take exception with what the FDA says, but it's certainly no reason to bring a lawsuit." Kaufman said the Maxxon investigation irritates him when he thinks about multibillion-dollar fraud at companies such as Enron Corp. and WorldCom Inc. "They spend all this time and resources on relatively minor allegations when, last year, Maxxon had a shareholders' meeting and not one shareholder voted against Mr. Mabie as CEO," he said. "These are the same shareholders the SEC has been charged to protect. The shareholders are obviously happy with Mabie, what's going on, and the SEC is just really hurting the shareholders," he said. The SEC also alleges that Mabie falsely or misleadingly said that Maxxon and representatives of the Swedish government were negotiating to build a plant that the Swedish government would pay for. "There were negotiations. Just because they didn't amount to anything didn't make them false," Kaufman said. "All he did was accurately report what was going on at the time. If he had a crystal ball job, he wouldn't need a job." Kaufman also disputed the SEC's allegations claiming that Maxxon and Mabie made false or misleading statements regarding the manufacturing of its syringe. "The SEC is attempting to split hairs of when manufacturing begins. It's a complex process," Kaufman said. Maxxon was in the manufacturing process even if the SEC disagrees, Kaufman said. "For the SEC to say that the manufacturing production starts at a certain process is absolutely absurd," he said. The SEC is seeking more than $1.5 million in what it says are ill-gotten gains. It also seeks a permanent ban against Mabie acting as an officer or director of any public company. By Laurie Winslow To see more of the Tulsa World, or to subscribe to the newspaper, go to tulsaworld.com. (c) 2003, Tulsa World, Okla. Distributed by Knight Ridder/Tribune Business News. pinksheets.com