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Tuesday, May 02, 2006

Genex Pharmaceutical (GENX) fraud?

GENX GENXE (sec) I went back to look at this company as part of revisiting companies and found something interesting. I looked at the 2004 10-K here. Also see the auditor denied post.

However, the really weird thing is this 8-K. It seems the company filed a fake letter from the auditors.
On November 17, 2005, we noticed that the Company filed an 8K on November 16, 2005 with the Securities and Exchange Commission, stating that Kabani & Company, Inc.'s services have been terminated and the Company has appointed another accounting firm based in Hong Kong, GC Alliance Ltd. as its auditor. The 8K also included exhibit 16.1, on our letterhead indicating that Kabani & Company, Inc. has read the 8K and agrees with it. In fact, Kabani & Company, Inc was never provided the 8K for review nor did we issue any letter agreeing with the 8K. The Members of the audit committee/The Board of Directors of the Company were informed by us via our letter dated November 18, 2005 about the unauthorized filing of the letter (attributed to our firm) with the 8K. The Company did not act to withdraw the alleged letter or rectified the 8K filings until it was officially asked to do so by the Security & Exchange Commission. We believe the Company has committed an illegal act in filing a letter with our firm's name on it and failed to withdraw in timely manner in spite of being made aware of it numerous times.
Stop following, needless to say

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