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Trading Suspended Over Anthrax Claim

November 07, 2001|Bloomberg News

The Securities and Exchange Commission on Tuesday suspended trading in shares of 2DoTrade Inc. while the agency looks into company statements that it's preparing to sell a disinfectant that may kill anthrax spores.

"Investment scams that attempt to prey on fears of terrorism are abhorrent," SEC Enforcement Director Stephen M. Cutler said in a news release. "We will be vigilant about rooting out and prosecuting those who seek to exploit recent events to defraud investors."

The agency has questions about the accuracy of news releases with claims about the anti-anthrax prospects of the company's disinfectant and about the existence of company contracts, its business operations and the identity of the company's management, the SEC said.

The trading suspension will last two weeks, the SEC said.

"I only heard about this three minutes ago. That's all I can say," said Russell Taylor, who is listed on SEC regulatory filings as 2DoTrade's chief executive. Reached by telephone in London, he declined to comment further.

In a news release Friday, 2DoTrade (ticker symbol: TDOT) said a trial of its Athoq disinfectant was underway at Ninewells Hospital in Dundee, Scotland. A Ninewells official said the hospital knew nothing about the study.

The 2DoTrade news release cited recent fears of terrorist attacks using anthrax, which is potentially fatal to humans. "We are pleased to play a part in the war on anthrax and bioterrorism in general, and production of the product is now ready to commence," 2DoTrade said.

The release said Glasgow Royal Infirmary in the west of Scotland and Southampton University in England also were involved in tests. Those assertions were disputed too.

2DoTrade's stock, which trades on the over-the-counter Bulletin Board, has more than tripled, to 46.9 cents from 15 cents, from the closing price before the company's Oct. 31 announcement about Athoq. From Oct. 31 through Monday, a daily average of almost 1.1 million 2DoTrade shares changed hands, more than seven times the stock's typical daily trading for the preceding six months.

2DoTrade, incorporated in Nevada, says it has offices in British Columbia, Canada, and in London, the SEC said.

The Sept. 11 attacks have led other companies to promote products that address fears about terrorism, including parachutes marketed to those working in tall buildings and a $2,799 "envelope sterilizer," said Council of Better Business Bureaus spokeswoman Holly Cherico.

Outright scams have ranged from peddling of fake victims' "ashes" to grieving families to bogus Web sites and e-mails soliciting money for victims of the terrorist attack.

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