Litigation Release No. 17971 / February 6, 2003
SEC v. International BioChemical Industries, Inc. and Timothy Moses , Case No. 1:03-CV-0346 (N.D.G.A. ).
SECURITIES AND EXCHANGE COMMISSION SUES NORCROSS BIOTECH COMPANY AND ITS PRESIDENT FOR FRAUD AND SUSPENDS TRADING IN COMPANY'S STOCK.
The Securities and Exchange Commission filed a complaint in the United States District Court for the Northern District of Georgia today, February 6, 2003, against International BioChemical Industries, Inc. ("IBCL"), a purported biotech firm located in Norcross, Georgia, and its president, chief executive officer and chairman of the board, Timothy C. Moses. The complaint alleges 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.
The SEC's complaint charges IBCL and Moses with violations of 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 SEC seeks a temporary restraining order, expedited discovery, preliminary and permanent injunctions against both defendants, as well as an order compelling disgorgement of ill-gotten gains, along with prejudgment interest and civil penalties. In a parallel proceeding, the SEC also suspended trading of IBCL's stock, which is traded over the counter and quoted on the Over-the Counter Bulletin Board, based on the same factual allegations. The National Association of Securities Dealers assisted the SEC in this matter.