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CombiMatrix Corporation Message Board

bitesr 77 posts  |  Last Activity: Apr 8, 2014 1:56 AM Member since: Apr 22, 2010
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  • Reply to

    The Lesson of Watergate: Follow the Money!

    by bitesr Apr 8, 2014 1:47 AM bitesr Apr 8, 2014 1:56 AM Flag

    This lawsuit is worth billions because the false advertising in the PR misinformation campaign is clear anti-competitive behavior, a violation of the Sherman Act. Perhaps even DoJ (Dept. of Justice) will step in because the PR misinformation campaign is attempting to deny pain patients a safer hydrocodone product with less addictive potential because it is extended release and avoids the pharmacokinetic spikes in plasma concentration that facilitate addiction to an opioid. Purdue et al. are celebrating the success of their PR misinformation campaign, so the fall will be large as this is anticompetitive behavior using false advertising to achieve damage to a competitive product in the same pain market segment. If I earn my living doing big antitrust cases, I'd be salivating at this opportunity.

  • The Mass lawsuit is a good first step but it is attacking a symptom, not the reaction to the massive root cause of the problem. The Gov of Mass will have to turn to his AG to defend the lawsuit. Since there was no thinking, no analysis that went into the knee-jerk reaction to the massive PR misinformation campaign, the Mass AG will recognize the stupid move in the executive order and revoke it. Lawsuit over. Now what?

    This is where we need to get to the source of the damage . The real lawsuit is a massive lawsuit for false advertising. Start with the PR consultants who have been broadcasting the misinformation and lies. Also include the lobbyists. Start by suing them. Then use subpoena power to follow the money. Who paid for the massive misinformation campaign? Purdue? Mylan? AbieVie? All of the above? Those are the deep pockets. Expose them. Sue them. Lost market share from the misinformation campaign is a measure of damages. The harm done in Mass is part of the damages. Moreover, seek putative damages, not just compensatory damages. This is also anti-competitive behavior, so add an antitrust claim (like Mylan v. Celgene). That's triple damages and attorney fees for anti-competitive behavior, the Big Kahuna of lawsuits.

    This is a major lawsuit and it can be done on contingency. But first you have to shake down the PR numbnuts who got paid for the misinformation campaign. They'll roll like a cheap w-h-ore and finger the pharma who hired them. Expose this corruption and don't focus on the politicians who are corrupt because our campaign finance lack of laws allows this corruption to continue. Anyway the largest employer in WVA who pays high wages is Mylan in Morgantown, so you can't fault politician looking out for a large employer.

    Sentiment: Strong Buy

  • Was speaking with a doc friend this weekend. He is buying the heck out of ZGNX because of how idiotic the media campaign of misinformation is. Zohydro is extended release. That means blood levels do not get as high as the Purdue junk that spikes higher blood levels. This means the addition potential of Zohydro is much lower, It's basic pharmacokinetics. Purdue is concerned about the addicts they've created. But ZGNX will not be creating new addicts.

    Moreover, any formulation that releases the drug can be abused by an addict. The who notion of tamper-proof is a myth. The only way to avoid having the product abused by addicts is to ban all opioid meds. Let's see haw far that gets in Mass. I though diversity diluted out Puritan influence from the landing of the Mayflower.

  • Reply to

    Summary of Recent Events

    by bitesr Mar 29, 2014 3:19 AM bitesr Mar 29, 2014 4:10 AM Flag

    So madaniels, if we take your thinking to its logical conclusions, all Chines JV's cook their books and are frauds because they are Chinese operations. Such entities are presumed guilty, until proven innocent by audits because they are in China. Setting aside the racist overtones for the moment, that is contrary to my experiences and results running China JV operations. Granted, I don't work in the coal industry and I don't represent LLEN, I'm just a schmuck shareholder. But I also own another Nasdaq company shares (and options) where I do work and it also has a CEO who speaks Mandarin. And the people there know that I take no prisoners for stupid and arrogant acts like Lee did. We also work with Chinese companies, like WX. In my experience, I would trust WX and its Chinese operations (they also have US operations) over any competitor US CRO company (the business WX is in). So no madaniels, your racial rant doesn't hold water in my experience where I worry not only about financials, but also about scientific data integrity. The tide is turning, and the old guard retires or forcibly gets put out to pasture.

  • Reply to

    Summary of Recent Events

    by bitesr Mar 29, 2014 3:19 AM bitesr Mar 29, 2014 3:33 AM Flag

    5. Lee is not a big career-making score for a federal prosecutor. He's just a dumb #$%$ who didn't do much, if any, actual damage. Expect this case to plead out with Lee retiring to Oso, WA to shovel mud in that slide-prone area. (what a tragedy, I've driven on that road, but not recently).
    6. As for the schmuck shareholders like me, this will trade again and eventually be valued based on earnings and growth, just like any other stock.
    7. As for the short-and-distort #$%$s like GEO and Carnes, justice will catch up to them, starting with Carnes, Lee's new "roomie." As a taxpayer who has to pay for their room and board, I say to bring back waterboarding, rather than paying for their stay in Club Fed. That will be a more effective deterrent to stupid #$%$ acts like Lee faking a CFO certification and then covering it up, or Carnes selectively ignoring expert evidence in his hit pieces, or the GEO numbnuts doing Jay Leno comedy sketches in China and drawing inflammatory conclusions. All three have driven well past their last exit to relevance, and all three need to leave the story. Their 15 minutes is up.

    As someone says in Alice in Wonderland: "OFF WITH THEIR HEADS!!" (oops, I just killed my chances to be named a judge)

  • by bitesr Mar 29, 2014 3:19 AM Flag

    1. Lee is spending at least a long weekend in federal prison. In my opinion he is cooked.
    2. After all the SEC investigatory work with massive subpoena powers, including access to internal emails (usually the key source of smoking guns), Lee stands accused of violating Sarb Ox and securities fraud because he used Nicol Leung's name without her permission as an acting CFO on the fiscal year 2008 SEC filings. She was a former director who resigned and was not the acting CFO. In my opinion Lee's actions in 2008 and in particular in May-June 2009 were arrogant and stupid. Falsely affixing an e-signature to SEC filings is a crime. What was worse was the cover-up. (Remember the lessons of Watergate.)
    3. The cover-up was when Leung found out about her being used as acting CFO and she wrote to Kiang, the head of the audit committee of the Board, complaining about it. Leung did the right thing. Kiang screwed up. Kiang spoke with Lee about it. Instead, Kiang should have brought the matter to the full audit committee and the Board (without Lee), much like an independent committee of the Board to investigate. Lee asked Kiang to cover it up but admitted wrong-doing only to her. Kiang did help to cover it up and that is why she copped a plea deal and voluntarily agreed to a lifetime ban/suspension. But the Board should have fired Lee over this back in 2009.
    4. Does this mean the deals done since mid-2009 were frauds? No. The SEC had and has access to all internal documents to investigate this and has not indicted Lee over any of the numbnut GEO accusations. It's always darkest before dawn. The sun starts to rise next week. I think LLEN has a bright future as a profitable and growing business without Lee or his younger brother Paul. This mess can be cleaned up, but it will take leadership from the Board to clean house and bring in a much younger crew, one with a better ethical core, to take the reins here.
    5. As for Lee, he's basically tabloid fodder. continued...

  • Reply to

    Nobel Prize for the Investigators and Geo!

    by sale_unlimited Mar 28, 2014 7:27 PM bitesr Mar 28, 2014 7:55 PM Flag

    Who are "they?" I used to ask my late grandmother that question all the time when I was growing up.

  • Either ZGNX or we should with some class action plaintiff lawyers. We should not get into the mud with Purdue in a PR battle. Yes I know that there is great irony and no shame with Purdue that whatever addiction epidemic that is so widespread in Mass that banning zohydro will do anything when Purdue's drug oxycontin caused it in the first place. There is no honor among thieves.

    But the Supreme Court just opened the door this week to level the playing field to fight what was a hugely successful (from Purdue's perspective) PR misinformation campaign to protect its market share. That success to Purdue becomes recoverable damages to ZGNX, thanks to the Supremes precedent in the Lexmark case.

    So let's do it! Actions speak louder than words. Don't just talk the talk on this message board, walk the walk.

    Nothing will stop the misinformation PR campaign and the congressional bills faster than a false advertising lawsuit.

  • The Mass situation is based entirely on the misinformation of Purdue's false advertising campaign. The statements from the Mass gov are taken directly from the Purdue false advertising campaign. The Supreme Court set the precedent this week in the Lexmark decision to provide jurisdiction. Damages are increasing. Once the case is filed, subpoena power will uncover the smoking guns. If Purdue tries to destroy evidence, it will face criminal penalties. Purdue is no stranger to criminal penalties in its sordid history with oxycontin.

  • Reply to


    by llenmbjudge Mar 28, 2014 2:10 PM bitesr Mar 28, 2014 3:03 PM Flag

    No GEO is not a whistleblower. The alleged crimes committed by Lee have to do with Sarbanes Oxley certifications. None of that was in the hearsay-laden, evidence-free GEO allegations. The GEO allegations are far more serious (in terms of LLEN valuation) than the Lee arrest for SEC violations. And the GEO allegations have been refuted by the company.

    Right now, it looks like the company can be salvaged. It is a sustainable and profitable business. But it needs a restructuring to remove the Lee taint. The young bilingual MBA army needs to step up to run this. The time is now. The irony is that Lee mentioned this group in the last call. The next generation of managers may prove to be Lee's legacy.

  • The information is coming out now:
    1. Lee was indicted two months ago. Notice how the case was filed on 29 January 2014, even though he's now in the federal prison in SeaTac. Although not a violent offender, he will probably have to give up his passport, as part of any bail hearing on Tuesday. Basically Lee is already out and the question is how the company moves forward without him. We don't need to await a resignation, he's gone. Good riddance.

    2. I'm still #$%$ off that the company didn't disclose the mine closures for government inspection until the 3Q earnings last week. The mines were closed in late November 2013 until late December when, according to the company, they passed inspection. But there was a Q2 earnings call in mid-December and I listened to the tape replay of it. Lee touted his new army of bilingual MBA's. Ian signed the Sarb Ox certification. No one said anything about the mine closures. All expressed a desire to put the fraud allegations behind them and move forward with a clean bill of health, in a matter of weeks, not months. It's been months, not weeks.

    The company needs to restructure and get rid of all of the Lee cronies. The new army of bilingual MBA's needs to step up. The time is now. A new era of shareholder transparency needs to start. TODAY.

    In a company I work for (no names), we did a bunch of M&A in 2013. One of the companies acquired is headed by a Lee-like character, one who tries to control information and rule the fiefdom. All I can say is that I've been hammering him, to get him into compliance for a public company and force him to play with the team. So far, it's working.

  • Reply to

    LLEN insurance cover SEC penalty?

    by dan93077 Mar 28, 2014 2:43 AM bitesr Mar 28, 2014 3:46 AM Flag

    Great story. But you have no evidence. Moreover, the fake Sarb Ox certifications are of concern to the SEC in order to make an example out of Lee and instill fear in the minds of others that you must take these certifications seriously. But none of this has any bearing on the GEO evidence-free allegations. As for your shrill comment that the JV will sink without Lee, I think they will thrive to work with new blood.

    LLEN's canary in the coal mine (couldn't resist that analogy) is Peng and the other independent directors. If they flee, I'll be concerned. Let's see if Fong steps up.

  • Reply to

    LLEN insurance cover SEC penalty?

    by dan93077 Mar 28, 2014 2:43 AM bitesr Mar 28, 2014 3:26 AM Flag

    The answer to your question is yes. D&O insurance is what any public company likely has because outside directors (or even inside directors) generally refuse to serve without it. This insurance covers the arrogant and stupid acts of directors and officers of the corporation. I believe it protects the corporation (but perhaps not Lee personally) for even fraudulent acts. There are likely exceptions in the policy for those found guilty or cop a plea for fraud. That means Lee will have to disgorge his profits and a penalty as determined by the federal court or a plea deal. The SEC allegation describes such a blatant illegal act,(mail fraud) the outcome of this case is not really in doubt. The SEC wants to make an example of Lee for his blatant disregard for key Sarb Ox certification requirements. In the companies where I work that are public, we take those certifications seriously and both the CEO and the CFO know that their posteriors are on the line. As a lawyer who reviews/writes the K's and Q's, as well as other SEC submissions, my posterior is also on the line because according to Sarb Ox that is considered practicing before the SEC. The in-house lawyer at LLEN is a recent law school grad who needs mentoring.

    A few years ago, the same Seattle federal prosecutor office nabbed a company officer (the actual acting CFO) of a private biotech company in Auburn (a few miles south of LLEN) for mail fraud when he sent in a fake audit to support the company federal grant funding. He did the perp walk, went to jail and pled out to a reduced sentence, but still a felony on his record. Please don't hire him at LLEN.

    The SEC hearing should be interesting, just like the hearing for our other #$%$ a wee bit to the north, Carnes. Birds of a feather, I hope they become cell-mates. Who will U1 see on her conjugal visits? If the hearing is public and I'm in town, I'll plant to attend. But my work-load is heavy right now.

  • Reply to

    Who lost the most I lost about 6000.00

    by mrhooptyjanky Mar 27, 2014 5:56 PM bitesr Mar 27, 2014 7:16 PM Flag

    Lee isn't "a Chinese guy" he is an American of Chinese origin. I'm also an American but of German origin (first generation). Does that make me a #$%$? You haven't lost anything until you sell or otherwise dispose of your shares. This company is making millions of dollars each quarter and that ain't chopped liver. Remember all of the mortgage fraud and how it was fraudulently packaged into collateralized loan obligations by such low-life doouch bags as Goldman Sachs, Citibank, Lehman, Bear Sternes et al.? Those were Americans who screwed their clients for much more money and were never prosecuted. I'm not making excuses for Lee as he violated Sarbanes Oxley in 2008 and 2009 according to the SEC allegations. That is illegal. Lee needs to resign or be removed, not only for his illegal act, but because he was so stupid to have done it in the first place. Did he really think he would not be caught. irrespective of the outcome of the criminal case against Lee, he is stupid in my mind for having done what he did. That is the combined deadly sin of arrogance and stupidity.

  • Reply to

    Snippet from BloombergLaw article

    by wordonthewallstreet Mar 27, 2014 6:08 PM bitesr Mar 27, 2014 7:01 PM Flag

    Yes, when in doubt, go back to the enabling statute. This is why I bought ZGNX about a year ago after the committee over-stepped their authority (beyond the scope of the FD&C Act) because the FDA's authority under the interstate commerce clause of the Constitution is to approve or not based on safety and efficacy (risk/benefit). Not go to the 10th Amendment to the Constitution, as the States don't have the power to overturn federal authority, even in their state. I'd love it if my state got #$%$ off and said no more IRS in our state, no more federal income taxes. Yeah, right, in my dreams. The same goes for banning Zohydro in a specific state.

    Meanwhile the paid off disinformation fruadsters bashing this stock, paid by the PR firm paid off by Purdue continue to spread their lies and disinformation. We not have jurisdiction to sue Purdue for false advertising, because that's what this disinformation campaign is all about. And that is why I added to my position yesterday.

  • Reply to

    She said / He said ???

    by dan93077 Mar 27, 2014 6:32 PM bitesr Mar 27, 2014 6:43 PM Flag

    Go to and read the two links to the press release. Kiang is living in Thailand, is a US citizen and copped a plea. She fingered Lee. Lee used Kiang because he needed a CFO and didn't have one so he wrote in Kiang even though she turned it down. The issue is not with the substance of the 2008 and 2009 Q's and K's but with the CFO certification that Lee make up. That is a federal crime to file a false statement with the SEC. It's considered mail fraud.

    But the SEC is not going to let us, shareholders, be punished for the criminal activities of Lee. The key take away is that Lee is a #$%$ and cannot be trusted. There is nothing to question that the number reported in 2013 or the most recent quarter are false. There is nothing to uphold that GEO's inflammatory conclusions with hearsay have any merit.

    I'm not here to excuse Lee. I think the federal prosecutor in Seattle should throw the book at him, with jail time if he cops a plea. We are all replaceable and LLEN can carry on just fine.

  • Reply to

    Have a nice day ... MY FRIENDS! .. AH AH AH

    by unemon1 Mar 27, 2014 6:23 PM bitesr Mar 27, 2014 6:26 PM Flag

    Yes it will be a great day when Carnes and Lee become cell-mates in prison. So who will you see for conjugal visits?

  • The only downside will be Lee's shares, which he'll have to sell to pay for his criminal legal defense costs. I read both SEC orders. I'm not making excuses for Lee. If the allegations are correct, he deserves criminal punishment. But this has to do with Lee playing fast and loose with Sarb Ox rules requiring certifications. This is not a way to run a business, particularly a public corporation where trust is required.

    But none of the SEC charges/allegations had anything to do with what the numbnuts like GEO and Carnes have been alleging about LLEN. If the racist bigots at Nasdaq finish up, the SEC allegations are irrelevant because the Nasdaq was investigating the GEO allegations with regard to ownership of the assets and if the revenues reported in the Q's and K's were real or fake. Even the SEC didn't support the GEO allegations because the SEC investigation was of Lee's behavior and only Lee's behavior with regard to the required Sarb Ox certifications.

    How could Lee be so stupid and arrogant that he could sub in an acting CFO to have all 0of the boxes checked? But please keep in mind that the crooked behavior was in 2008-2009 and there is no allegation that this criminal behavior extended beyond 2009.

    Therefore, let's get this trading again and if Lee is wearing orange, replace him and keep this profitable business operating for the benefit of us, the public shareholders.

  • Reply to

    We Can Sue Purdue for Over $250Mil in Damages!

    by bitesr Mar 27, 2014 2:24 PM bitesr Mar 27, 2014 3:04 PM Flag

    No, there is the First Amendment protecting the legitimate press from revealing their sources. However, if any of the sources of disinformation send to media reporters originated from Purdue and any lobbying or PR organization paid by Purdue, those emails and correspondence and money trails can be subpoena'd, even in a civil suit for false advertising. Remember, as class action plaintiffs, we have subpoena power to expose this trail of corruption and the burden of proof for false advertising is much lower than shareholder fraud. Remember, the securities plaintiffs bar will jump at this chance because the Supremes just opened the door (this week) to jurisdiction. That's the key new wrinkle, jurisdiction for false advertising.

  • Reply to

    We Can Sue Purdue for Over $250Mil in Damages!

    by bitesr Mar 27, 2014 2:24 PM bitesr Mar 27, 2014 2:55 PM Flag

    If management is "looking at this" please tell them about the Supreme Court decision this week in Lexmark v. Static Control. It is brand new and open the jurisdiction door for a false advertising lawsuit. This is because of the damages caused by the PR and lobbying campaign. But who has suffered those damages? Actually not ZGNX because Zohydro has not been taken off the market anywhere. It is the poor schmucks like me whose stock portfolio has been hit. That is why the shareholders need to file the lawsuit as a class action. We are collateral damage from Purdue's effort to protect its market share, harm innovation and complete disregard for the safety and welfare of patients in need of effective pain relief medication.

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