Securities and Exchange Commission
Litigation Release No. 17991 / February 21, 2003
Norcross, Georgia Biotech Company and its President Settle Lawsuit Brought by the Securities and Exchange Commission
SEC v. International BioChemical Industries, Inc. and Timothy Moses, Case No. 1:03-CV-0346-JTC (N.D.G.A.).
International BioChemical Industries, Inc. ("IBCL"), a purported biotech firm located in Norcross, Georgia, and its president and chief executive officer Timothy C. Moses today settled the lawsuit filed by the Securities and Exchange Commission ("Commission") in the United States District Court for the Northern District of Georgia. The Commission's complaint in this matter alleged that, beginning on January 29, 2003, IBCL issued a series of false and misleading press releases that falsely indicated that the federal government contacted the company to discuss the effectiveness of the company's products in the war on bio-terrorism and created the false impression that federal government was interested in purchasing IBCL's products. To the contrary, the Federal Bureau of Investigation ("FBI") contacted IBCL pursuant to its inquiry into the post-September 11, 2001 anthrax mailings. The FBI never expressed any interest in purchasing IBCL's products. The complaint alleges that, as a result of the false press releases, IBCL's share price and trading volume increased dramatically.
As part of the settlement, the Court entered orders that permanently enjoined IBCL and Moses from violating the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The order against Mr. Moses also directed him to disgorge $11,648.33, representing the profits he gained as a result of the conduct alleged in the Commission's complaint plus prejudgment interest. According to the Court's orders, the issue of civil penalties to be paid by IBCL and Moses, if any, will be resolved at a later date. Moses and IBCL consented to the entry of these orders without admitting or denying the allegations in the Commission's complaint.
The National Association of Securities Dealers assisted the SEC in this matter.
Related Litigation Release No. 17971 / February 6, 2003