Let's make sure we keep separating the issues.
1) CYDY's position is that Amarex did not collect the data in a professional manner, at industry standards, according to 3 independent auditors who concluded that the data could not be salvaged to be used for the FDA submission.
People seem to be forgetting that Amarex's initial filing was rejected by the FDA on grounds on incompleteness, and the FDA gave them point-by-point guidance as to what needed to be done to remedy the deficiencies. In the MANY months that followed, not only were those deficiencies NOT remedied, there were new problems with data being entered in incorrect places in the FDA's (very complex and lengthy) document. Some data, like dates of dosage for some patients, had not been recorded and thus that deficiency could not be remedied. How can anyone consider failing to record data, and entering data in the wrong categories after explicit guidance, to be work done at industry standards?
CYDY also says that Amarex billed them for work that was not done.
CYDY says that these problems were communicated to NSF's CEO, who said he would investigate. Despite his having appointed 2 very high-level NSF executives to high-level positions at Amarex, NSF then did not remedy these deficiencies in Amarex, their newly-acquired company, nor did the NSF CEO follow up with CYDY as he is alleged to have promised. NSF having 2 employees essentially running Amarex, and a CEO who promised to investigate, indicates control of Amarex. This should be useful if CYDY ends up in court, because it would help in making NSF financially liable for any awards ("piercing the corporate veil"
if/when NSF were to deny responsibility.
We have also learned from the SEC filing that CYDY was Amarex's biggest and most important customer. A reasonable person would expect that NSF would have looked at the work being done for the biggest customer before purchasing Amarex.
These issues are the ones that are now in arbitration between CYDY and Amarex.
2) The SEC filing concerns the alleged actions of 2 individuals, Nader Pourhassen and Kazem Kazempour. Their claim is that NP pumped up the stock, and he and KK both sold stock, knowing that the filing was incomplete.
This is a separate issue from the CYDY/Amarex arbitration.
Please note that the SEC filing EXPLICITLY states that NP's actions were forbidden to NP, and that he violated the company's rules in doing this.
I would hope that this would in some measure help CYDY defend against any shareholder suit that might arise, given that NP allegedly abused his position within the company to violate company policy, with full knowledge of said policy.
I have no idea whether these charges are true, and neither does anyone posting on this board. More information should come out if this goes to trial. It does not look good, but there are many cases where something that looked terrible turned out NOT to be the correct way to view an incident.
As far as a defense for NP's actions: I have never claimed to be an attorney.
However, if I were NP, I would say "I thought that Amarex was dragging their feet, so I sent them that email saying that it had to be filed because I thought this would force them to finish the filing. I'm not a biologist, so when they filed it, I thought it was complete. After all, I paid them an extra $150,000 to complete it, which I shouldn't have had to pay at all because they had had TWO YEARS to compile the data and file the form. I sold the stock because Kazempour told me in a conversation that it would be ready. Of course I don't have that conversation recorded, Maryland is a 2-party consent state for recording conversations, and I didn't want to make him defensive and perhaps not be forthcoming with information. Besides, I trusted him."
• I have been surprised that there have not been multiple ambulance-chaser "shareholder" suits filed. In the past, even the slightest whiff of problems at other companies resulted in a furry of press releases from law firms claiming that they were "investigating" and seeking lead plaintiffs. The fact that we as yet have not seen these suits makes me think that the situation is too complex for a typical ambulance-chaser firm to want to mess with. The "greenmail" business model is to file nuisance suits, and then settle for a relatively small payment (in the hundreds of thousands) because that's cheaper for the company being greenmailed that it would be to engage attorneys.
Maybe Sidley-Austin's involvement with CYDY scares off the greenmailers.
1) CYDY's position is that Amarex did not collect the data in a professional manner, at industry standards, according to 3 independent auditors who concluded that the data could not be salvaged to be used for the FDA submission.
People seem to be forgetting that Amarex's initial filing was rejected by the FDA on grounds on incompleteness, and the FDA gave them point-by-point guidance as to what needed to be done to remedy the deficiencies. In the MANY months that followed, not only were those deficiencies NOT remedied, there were new problems with data being entered in incorrect places in the FDA's (very complex and lengthy) document. Some data, like dates of dosage for some patients, had not been recorded and thus that deficiency could not be remedied. How can anyone consider failing to record data, and entering data in the wrong categories after explicit guidance, to be work done at industry standards?
CYDY also says that Amarex billed them for work that was not done.
CYDY says that these problems were communicated to NSF's CEO, who said he would investigate. Despite his having appointed 2 very high-level NSF executives to high-level positions at Amarex, NSF then did not remedy these deficiencies in Amarex, their newly-acquired company, nor did the NSF CEO follow up with CYDY as he is alleged to have promised. NSF having 2 employees essentially running Amarex, and a CEO who promised to investigate, indicates control of Amarex. This should be useful if CYDY ends up in court, because it would help in making NSF financially liable for any awards ("piercing the corporate veil"
if/when NSF were to deny responsibility. We have also learned from the SEC filing that CYDY was Amarex's biggest and most important customer. A reasonable person would expect that NSF would have looked at the work being done for the biggest customer before purchasing Amarex.
These issues are the ones that are now in arbitration between CYDY and Amarex.
2) The SEC filing concerns the alleged actions of 2 individuals, Nader Pourhassen and Kazem Kazempour. Their claim is that NP pumped up the stock, and he and KK both sold stock, knowing that the filing was incomplete.
This is a separate issue from the CYDY/Amarex arbitration.
Please note that the SEC filing EXPLICITLY states that NP's actions were forbidden to NP, and that he violated the company's rules in doing this.
I would hope that this would in some measure help CYDY defend against any shareholder suit that might arise, given that NP allegedly abused his position within the company to violate company policy, with full knowledge of said policy.
I have no idea whether these charges are true, and neither does anyone posting on this board. More information should come out if this goes to trial. It does not look good, but there are many cases where something that looked terrible turned out NOT to be the correct way to view an incident.
As far as a defense for NP's actions: I have never claimed to be an attorney.
However, if I were NP, I would say "I thought that Amarex was dragging their feet, so I sent them that email saying that it had to be filed because I thought this would force them to finish the filing. I'm not a biologist, so when they filed it, I thought it was complete. After all, I paid them an extra $150,000 to complete it, which I shouldn't have had to pay at all because they had had TWO YEARS to compile the data and file the form. I sold the stock because Kazempour told me in a conversation that it would be ready. Of course I don't have that conversation recorded, Maryland is a 2-party consent state for recording conversations, and I didn't want to make him defensive and perhaps not be forthcoming with information. Besides, I trusted him."
• I have been surprised that there have not been multiple ambulance-chaser "shareholder" suits filed. In the past, even the slightest whiff of problems at other companies resulted in a furry of press releases from law firms claiming that they were "investigating" and seeking lead plaintiffs. The fact that we as yet have not seen these suits makes me think that the situation is too complex for a typical ambulance-chaser firm to want to mess with. The "greenmail" business model is to file nuisance suits, and then settle for a relatively small payment (in the hundreds of thousands) because that's cheaper for the company being greenmailed that it would be to engage attorneys.
Maybe Sidley-Austin's involvement with CYDY scares off the greenmailers.
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