Following up to our phone conversation of this afternoon. I have uncovered information indicating that at least two former top level technical managers from Enzon have been hired by Belrose Pharma Inc. (again, see Enzon's May 5 2013 8K filing). These two individuals are Dr. XXXX former head of Enzon's XX Department, let go from Enzon in XX, and Dr. YY former VP of YY, let go from Enzon in YY.
This information has been given to me by Mr. ZZ in a telephone conversation on June 10th. Mr ZZ is a ZZ and was himself let go from Enzon in ZZ, and is currently unemployed. Mr. YY indicated that he had been in contact with Dr. XX and that is how he leaned of the Belrose actions.
I tried to confirm this information with Dr. XX but when I called him he said there would be no profit in talking to me and said he had nothing to say. I had spoken to him by phone on May 7th, at which time he was reluctant to have much to say but did talk about the state of Enzon and the IP and indicated that he was unemployed, but was hopeful that something was going to come through for him soon. He said he couldn't give me any details at that time but that we could talk again at a later time. It is my speculation that if Belrose and the Enzon deal-makers hadn't come through for him with a job he might have turned into a whistle-blower.
In effect what is a play here is Enzon has sold its IP and clinical developments (over one hundred active US patents [and as many or more internationally], multiple pipeline product candidates that have passed phase I and in some instances phase II clinical trials) which cost hundreds of millions of dollars to accomplish, to a two month old holding company, for less than one million dolllars. And now, this holding company is hiring the Enzon technical talent to leverage the IP and pipeline products,
I sincerely hope that the SEC is and will be able to do something about this and not leave such an important matter to the State of Delaware. The prospect of Delaware cleaning up its lucrative corporate governance policy will not be an answer. Hedge funds are growing in number by roughly a thousand per year. They control over two trillion dollars in active market assets, by many estimates accounting for over 50% of all trades on a daily basis. Failure to check hedge fund driven market manipulation, fraud and corporate malfeasance will lead to chaos in the markets. If these large hedge funds in this particular instance can pull this type of fraud off in broad daylight on the NASDAQ it will be an invitation for more of the like. The already deeply troubled retirement and pension systems throughout the country will surely be the next financial disaster if this kind of wealth transfer and destruction is allowed to be come common practice.
Further, Enzon has explained this sale to shareholders in a May 5, 2013 (8K) Current Report, in which in just three (3) sentences the company explains the terms of the agreement and what shareholders are expected to receive in return.
Let me remind the SEC that there are are five 5% holder institutions (hedge funds) who hold a combined 25 million of the 44 million outstanding shares in Enzon. I find it preposterous that these shareholders wound not demand, and be informed, about this transaction in more detail than is presented in the May 5th 8K just mentioned. And if they have been, then this is a clear violation of the SEC's Regulation FD.
Further, I submit that there is abundant circumstantial evidence for going well beyond the failure to provide fair disclosure. That in fact, there is fraud, in that the management and board of directors of Enzon have sold off intellectual property and its candidate product pipeline to an entity in which a subset of the shareholders (5% holders) have controlling financial interests or will realize the value from this transaction themselves alone, paying little or nothing to the remaining shareholders via the mechanisms reported in the three sentences alluded to in the May 5th, 8K current report.
Some of the largest hedge funds in the world are involved in this scheme. Their ability to take apart company like Enzon, steal for shareholders small and mid-sized (slow moving, investment and mutual funds) alike and sell off the parts in a shadowy deal, while the company is still on the NASDAQ, with full suite of SEC reporting requirements in full view, is a shocking development.