May 6, 2008
SCIELE Pharmaceutical SCRX was attacked again today costing small investors 10's of thousands of dollars. The company just released a favorable and promising 1Q earnings report and announced strong prospects for the future. They also announced a share buy-back and termination of a "Poison pill" provision. Nonetheless, short sellers sold short blocks of shares early in the day and later increased the volume of selling in a thin market to promote a selling frenzy and take out stops. Panicked investors then sold shares back to the shorts incurring substantial losses. SCRX closed down over 7% on no news. Where is the SEC? The SEC has told us they can "Easily" monitor this fraudulent abuse. The fraudulent traders are in and out of the market in the space of 3 hours. No cash changed hands. The frauds end up with profits and the small investors end up with the losses. This is not a greedy small investor trying to win big on a penny stock. This comes as a result of investing in a strong profitable company with 160 million of cash in the bank. There is no protection from this fraud as the small investor has no advocate.