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Biotech / Medical : GMXX - GENEMAX CORP
ISON 0.00Jun 23 4:00 PM EDT

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To: afrayem onigwecher who wrote (931)12/29/2004 10:46:57 AM
From: StockDung   of 978
 
.IN THE MONEY: GeneMax Naked-Short Suits Dismissed

28 December 2004
17:42
Dow Jones News Service
English
(c) 2004 Dow Jones & Company, Inc.

By Carol S. Remond
A Dow Jones Newswires Column

NEW YORK (Dow Jones)--Two more lawsuits alleging illegal short selling
by brokerage firms have been dismissed without much fanfare.

Biotech company GeneMax Corp. (GMXX) was at the forefront of companies
protesting what they said were unfair attacks by short sellers in late
2002. Back then and through much of 2003, GeneMax and its then-marketing
firm Investor Communications International, or ICI, led a campaign
against naked short selling, or short selling without first borrowing
securities to make delivery.

As part of its campaign, GeneMax filed lawsuits in Canada and in the
U.S. to try to prevent brokerage firms from engaging in naked short
selling.

GeneMax filed a lawsuit against Canadian brokerage firms Global
Securities Corp. and Union Securities Corp. in September 2002 in the
Supreme Court of British Columbia. The company alleged that the
brokerages engaged in illegal short selling to manipulate the price of
its shares.

A court order obtained by Dow Jones Newswires shows that suit was
dismissed on Dec. 16. A countersuit filed by Global Securities and Union
Securities was also dismissed.

GeneMax had widened its legal fight with the brokers to U.S. courts in
October 2002 when it filed suit against 11 brokerage firms in the U.S.
District Court for the District of Nevada. That suit was dismissed. But
the company filed another suit in November 2003 that mirrored much of
the illegal short selling allegations it made in its first Nevada suit,
including fraud and racketeering. The original suit named Knight Trading
Group Inc. (NITE), Charles Schwab Corp. (SCH) and nine others and seeks
injunctions to prevent the firms from shorting GeneMax shares and
unspecified damages.

Court documents show that the 2003 Nevada suit was dismissed on Nov. 9.

GeneMax's shares, which topped $20 a share in late 2002, are now trading
at a mere 24.5 cents in very thin trading.

GeneMax's President and Chief Executive Ronald Hanford wasn't
immediately available to comment.

GeneMax was the subject of three "In The Money" columns in 2002 and
2003. Those columns questioned whether insiders would benefit most from
limits on short selling and GeneMax's connection to consultant ICI.
GeneMax terminated its agreement with ICI in late 2003.

In a short sale, a security not owned by the seller is sold in
anticipation of a decrease in the stock's price. In the U.S., NASD
requires that before they engage in short sales for themselves or
clients, firms make an affirmative determination that they can borrow a
security or will be able to provide it for delivery on demand. Market
makers are exempt from the affirmative determination rule when engaged
in "bona fide market making activity" because they provide needed
liquidity to the market. Earlier this year, NASD tightened its
affirmative determination rule, making it harder for Canadian brokerages
to take advantage of the fact that no borrowing requirement exists in
that country.

In September, another suit alleging naked short selling was dismissed
after Jag Media Holdings Inc. (JAGH), which also led the charge against
naked short selling in the U.S., failed to make its case.

Jag Media and Gary Valinoti, the company's former chief executive, sued
more than 100 brokerage firms, investment firms and financial
institutions in July 2002, alleging that they entered into a civil
conspiracy and concert of action to short sell Jag Media's stock. In the
suit, originally filed in the Judicial District Court, Harris county in
Texas and later removed to the U.S. District Court for the Southern
District of Texas, Houston Division, Jag Media alleged that the
financial institutions committed market manipulation and fraud and
violated securities laws.

That case was dismissed by U.S. District Judge Vanessa Gilmore after she
found multiple deficiencies in Jag Media's third amended complaint.
Gilmore found that Jag Media didn't have a viable claim against those
defendants.

(Carol S. Remond is an award-winning columnist and one of four who write
the "In The Money" feature. Most recently, she shared a 2003 Best of
Business Award from the Society of American Business Editors and Writers
for her role in Dow Jones' team coverage of the Canary Capital mutual
fund trading scandal.)

-By Carol S. Remond; Dow Jones Newswires; 201 938 2074;
carol.remond@dowjones.com [ 12-28-04 1742ET ]

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