FRANK SALVATO: WHEN WALL STREET GREED KILLS
NewMediaJournal.us.
In the movie Wall Street, the character Gordon Gecko expounds to an audience of shareholders, “Greed is good.” Gecko, a Wall Street tyrant whose specialty was destroying companies for profit, eventually gets his due in the end. But there are real life market manipulators that prowl the shadows of Wall Street and in the genre of biotech the greed of the market manipulators sometimes kills.
People with a cursory understanding of market manipulation understand the tactic of “short and distort.” This is a type of securities fraud in which market manipulators short sell a stock and then spread negative rumors about the company in an attempt to drive down stock prices. Sometimes this fraud is originated by a company’s competitors. Other times it is fueled exclusively by greed. And while a successful short and distort campaign may glean hefty rewards for those who perpetrate the crime, the fiscal malfeasance is often fatal for the company that is attacked.
A good example of this is playing out in real time.
On Monday, July 30, 2014, Galectin Therapeutics, a company working on a promising avenue in the fight against kidney, liver and lung fibrosis, as well as melanoma, issued a statement about findings from a cohort 2, phase 1 drug trial. The company has received “fast track” status from the FDA. CNBC reports that no FDA fast tracked drug that has advanced to “breakthrough drug” status has failed to come to market. And with excellent cohort 1 results, it appeared as though the company was well on the way to developing cures for diseases which exist today as terminal. But while the results of the cohort 2 trial were considered positive in the eyes of subject experts, the market manipulators saw an opportunity to defraud the investors and the public, inflicting tremendous damage on the company and the company’s work on a cure for these diseases.
One of the most notable participants in what appears to be a concerted effort to exploit the destruction of a biotech company for personal profit is Adam Feuerstein, a senior columnist for TheStreet.com, whose formal education ends at the bachelor’s level in political science. He has bounced around the financial analysis circles in areas such as software and technology, and even commercial real estate, before landing in one of his favorite niches, biotech. In the events surrounding Galectin Therapeutics, it appears that Mr. Feuerstein is more concerned with tearing the business down on an operational level than with the drug research in which the company is engaged.
In “Galectin Pays Stock Promoters to Entice Retail Investors,” published July 28th, 2014, two days before Galectin Therapeutics’ cohort 2 results announcement, Mr. Feuerstein strains the boundaries of journalistic ethics by setting limits to the definition of a rhetorical descriptor:
“Only someone being paid to shill would claim Galectin is ‘nipping at [a competitor’s] heels.’ [The competitor] is way ahead in developing a drug to treats (sic) non-alcoholic steatohepatitis (NASH), a severe form of fatty liver disease…”
And in “Galectin Drug is a Fatty Liver Flop,” published less than two hours after the cohort 2 announcement, Mr. Feuerstein – a man with no formal scientific training – makes an unqualified scientific hypothesis in that:
“Galectin’s experimental drug GR-MD-02 flopped in a phase I study of nonalcoholic steatohepatitis (NASH), a severe form of fatty liver disease.”
Of course, a learned reading of the cohort 2 results presents data that completely expose Mr. Feuerstein’s knowledge of scientific research – and especially where galectin protein research is concerned – as ignorant of the process. A rebuttal article written by Terry Chrisomalis at BiotechPickList.com states:
“Shares of Galectin Therapeutics were punished on Tuesday July 29th after reporting the phase 1 results of its NASH trial with patients in the 2nd cohort. The stock tanked as much as 60% on the news, but the selloff [was] given a bigger push down by many bearish articles from various writers on Wall Street…As of now these bearish articles are just speculating, and have no hindsight on whether the drug compound is efficacious or not.”
And Galectin isn’t the only corporation that has been targeted by Mr. Feuerstein. Similar debilitating articles have been written about Northwest Biotherapeutics, GTx Incorporated, MannKind Corporation, Dendreon Corporation, Cel-Sci, and BioElectronic Corporation, among others.
So, the question begs to be asked. Why would a senior columnist for a financial website tread the fine line of fraud and criminality so openly and brazenly? Perhaps the announcement of an SEC investigation request by Citizens for Responsibility & Ethics in Washington (CREW) answers that question:
“Citizens for Responsibility & Ethics in Washington…requested the Securities & Exchange Commission investigate possible illegal manipulation of stock prices in Northwest Biotherapeutics, a biotechnology company developing cancer treatment drugs. Strategically released blog posts by well-known biotech stock analyst and senior columnist for TheStreet.com Adam Feuerstein seem designed to cause the price of the company’s stock to fall at times when short sellers were financially overexposed.”
One has to wonder what people with kidney, lung, liver fibrosis and cancer think of greed merchants like Adam Feuerstein. One also has to wonder who might be paying him to do what he does.
Optional:
Frank Salvato is the Executive Director for BasicsProject.org a grassroots, non-partisan, research and education initiative focusing on Constitutional Literacy, and internal and external threats facing Western Civilization. He is featured at FrankJSalvato.com: Because Our Republic Is Worth It. Mr. Salvato sits on the board of directors for Founders Alliance USA, a solutions-oriented non-profit organization. He also serves as the managing editor for NewMediaJournal.us. Mr. Salvato has appeared on The O’Reilly Factor on FOX News Channel and is a regular guest on talk radio across the country. Mr. Salvato is available for public speaking engagements. He can be contacted at franksalvato@basicsproject.org.
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