Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 14 of 15)

    What follows is PART 14 of a 15-PART series. The last installment will appear on Deep Capture in the coming days, after which point the story will be published in its entirety.

    Click here to read PART 1

    Click here to read PART 2

    Click here to read PART 3

    Click here to read PART 4

    Click here to read PART 5

    Click here to read PART 6

    Click here to read PART 7

    Click here to read PART 8

    Click here to read PART 9

    Click here to read PART 10

    Click here to read PART 11

    Click here to read PART 12

    Click here to read PART 13

    Where we left off, we had learned that on March 29, 2007, an FDA advisory panel overwhelmingly voted to approve Provenge, a vaccine that Dendreon had developed for prostate cancer. As a result, most financial analysts and investors believed that Dendreon had a promising future. However, ten hedge funds (out of a universe of 11,500 hedge funds) held large numbers of Dendreon put options (bets against the company), suggesting they expected that Dendreon would be derailed. At least seven of those hedge funds can be tied to Michael Milken or his close associates.

    We had also learned that Milken himself stood to profit if Dendreon were to experience unexpected problems receiving FDA approval. This is because Milken was the early financier and principal deal maker for ProQuest Investments, a fund that (along with an affiliate) controlled a company called Novacea, which was one of Dendreon’s competitors in the race to produce a new treatment for prostate cancer. Meanwhile, Lindsay Rosenwald (a Milken crony who once helped run a Mafia-linked brokerage called D.H. Blair, which specialized in pumping and dumping fake biotech companies) controlled Cougar Biotechnology, which was Dendreon’s second competitor in the race to develop a treatment for prostate cancer. And hedge funds affiliated with Milken or his close associates were also heavily invested in Cell Genesys, which was Dendreon’s third competitor.

    We had learned further that Milken’s “philanthropic” outfit, the Prostate Cancer Foundation, which appears to act in concert with Milken’s investment fund, ProQuest, had supported Novacea, Cougar and Cell Genesys. The Prostate Cancer Foundation’s support for these companies preceded announcements that they had signed massive deals with large pharmaceutical companies. In the cases of Novacea and Cell Genesys, those deals were soon cancelled on the news that their treatments were ineffective, and the companies’ investors quickly dumped their stock. This fact, combined with other evidence, suggests that the Prostate Cancer Foundation was supporting what amounted to sophisticated “pump and dump” schemes.

    Meanwhile, the Prostate Cancer Foundation snubbed its nose at Dendreon. And in April, 2007, Dr. Howard Scher, who was an executive and director of ProQuest, and the chairman of the Prostate Cancer Foundation’s “Therapeutic Consortium”, spearheaded an unprecedented lobbying effort to convince the FDA to reject Dendreon’s treatment – the first time in history that the FDA had gone against an advisory panel’s recommendation to approve a drug for terminally ill patients. This lobbying effort had the support of government officials who have ties to Michael Milken.

    In the days before and after the lobbying effort, Dendreon was trashed by a few captured journalists – most notably, CNBC’s Jim Cramer — and was also subjected to a blistering attack by naked short sellers who illegally flooded the market with millions of phantom shares to help drive down the company’s stock price. This criminal naked short selling continued intermittently for much of the next two years, while other events conspired to hobble Dendreon, a company that had completed multiple clinical trials that strongly indicated that its product, Provenge, was capable of lengthening the lives of tens of thousands of men with prostate cancer…

    * * * * * * * *

    In July 2008, not long before Cell Genesys announced that its drug was killing people, CNBC’s Jim Cramer called Dendreon a “dog.” Cramer, of course, did not mention that the illegal naked short selling of Dendreon was continuing apace. Throughout that month, more than 1 million Dendreon shares “failed to deliver” every day, according to SEC data.

    At the end of August 2008, after Cell Genesys announced that its drug was killing people, Milken’s Prostate Cancer Foundation posted a story that suggested that this failure was a sign that Dendreon could be in trouble, too. Clearly, the Prostate Cancer Foundation, whose top officials had done so much to derail Dendreon in 2007, were not eager to see the company’s treatment reach patients.

    Not once did the Prostate Cancer Foundation note that the difference between Dendreon and the three companies promoted by the Prostate Cancer Foundation was that Dendreon had provided heaps of evidence that its treatment actually worked.

    In October 2008, Dendreon released still more favorable data. Its Independent Monitoring Committee’s studies were showing (as had the company’s phase 3 trials in 2007) that Provenge was safe, and offered a significant survival advantage over a placebo.

    Meanwhile our two favorite financial analysts – the singing Sendek and Jonathan Aschoff – continued to reiterate their sell ratings on Dendreon.

    The attacks continued through March 2009, which is when we were treated to the reappearance of  Matthew Herper, the Forbes reporter who had dismissed Dendreon during those strange occurrences in April 2007. Now, Herper published a story in which he made it clear that Dendreon’s treatment would not, and should not, be approved by the FDA.

    In support of his claims, he cited the analysis of Dr. Thomas Fleming, one of the three people whose missives had ended up in the hands of The Cancer Letter. To show that Fleming (who is not a physician, but rather a statistician) was not the only “expert” opposed to Dendreon’s treatment, Herper cited several other “experts”  – Susan Ellenberg, Donald Berry, and Janet Wittes – who had views that were remarkably similar to Fleming’s.

    What Herper did not mention is that Susan Ellenberg had co-authored a book with Fleming, Janet Wittes was credited with editing that book, and that book enthusiastically cited the work of Donald Berry. Clearly, these “experts” had worked together to make sure that one message was whispered in Herper’s ear.

    While Herper was working on his article, John Stewart of the “Daily Show” began exposing Jim Cramer as a fraud. This created quite a stir, and in the midst of it Cramer went on CNBC to tout none other than….Cougar Biotechnology, the company controlled by Lindsay Rosenwald, formerly of the Mafia-linked “pump and dump” shop D.H. Blair. Cramer said he thought Cougar was the next big thing in prostate cancer treatment, and everybody should load up on its stock.

    Meanwhile, with Novacea and Cell Genesys killing people, Milken’s “philanthropic” outfit was now directing much of its energy to promoting the mostly untested treatment then being hawked by Cougar Biotechnology.

    Cougar’s treatment “has recently attracted global media coverage,” began one Prostate Cancer Foundation press release, which described the treatment as “a promising experimental medication with the potential to treat patients who have failed conventional medical treatment for advanced prostate cancer…”

    The press release continued:  “The [Prostate Cancer Foundation] Therapeutic Clinical Investigation Consortium played an important role by accelerating US clinical testing of this new agent in Phase II clinical trials….In Phase 1 studies, [Cougar’s treatment] exhibited the potential to attenuate disease progression and shrink tumors.”

    Actually, the studies were not quite so encouraging as Milken’s foundation would have one believe. Abiraterone had been tested on a total of 30 patients. These patients purportedly experienced declines in levels of “prostate specific antigen,” but this is a long way from demonstrating that  Cougar’s treatment “attenuates disease” or “shrinks tumors.” As for that “potential to treat patients,” it will be at least two years before Cougar has enough data to submit an application for FDA approval.

    For the sake of prostate cancer patients everywhere, Deep Capture hopes that Cougar’s drug proves to be successful. We wish merely to note the different reception the network of Milken cronies delivers to a drug like Provenge, whose supporting data is ample and overwhelmingly positive, versus the opinions the network expresses about a drug whose data is preliminary and inclusive, but whose investors hail from the Milken network.

    We also wish to reiterate that Milken’s Prostate Cancer Foundation and people tied to Milken gave ringing endorsements to companies – Novacea, Cell Genesys, and Cougar Biotechnology – right before those companies entered into purportedly massive deals with major pharmaceutical companies. In the cases of Novacea and Cell Genesys, those massive deals were canceled soon after they were signed because the companies’ treatments were shown to be ineffective.

    Yet, in all three cases, investors with ties to Milken or his close associates made large fortunes selling out their stock soon after the companies received over-the-top endorsements from the Prostate Cancer Foundation. Meanwhile, the Prostate Cancer Foundation, whose officials had played a key role in derailing Dendreon back in 2007, continued to snub its nose at Dendreon’s Provenge, the one treatment that could be safely and effectively administered to patients – right away.

    * * * * * * * *

    It is not clear if Milken himself was invested in Cougar, but Dr. Samuel Saks, who was a director on Cougar’s advisory board, was also a board member of Milken’s fund, ProQuest Investments. Three other members of Cougar’s advisory board were doctors affiliated with Milken’s “philanthropy,” the Prostate Cancer Foundation.

    In addition to Rosenwald, the biggest investors in Cougar Biotechnology have included Millennium Management (the hedge fund that was co-founded by the guy who was going to murder Ivan Boesky, and later died of an early heart attack) and Visium Capital, which is co-owned by Dimitry Balyasny and Jacob Gottleib.

    As noted, Millennium, Visium and Balyasny were also among the largest shareholders in Cell Genesys when the Prostate Cancer Foundation began promoting that company’s treatment, GVAX, in mass mailings and flyers handed out in front of shopping malls. Millennium’s manager and Dmitry Balyasny, meanwhile, were among the seven traders who were betting big against Dendreon in March 2007.

    The few media stories about Balyasny make him seem like he is a “prominent” investor – and a poster boy for the American dream. Born in Russia, he came to America as a young man and soon started raking in the bucks as a “whiz kid” investor. In addition to Visium, Balyasny is the proprietor of Balyasny Asset Management. Some of Balyasny Asset Management’s employees —  including, for a period of time, the fund’s chief risk officer — have come from SAC Capital, the hedge fund run by Milken crony Steve Cohen.

    A great many of Balyasny’s other employees were hired from a hedge fund called Magnetar Capital. The senior partner and investment committee chairman of Magnetar is Michael S. Gross, who was previously a founding partner of Apollo Advisors, the investment fund run by Milken crony Leon Black.

    As you will recall, Leon Black funded the new Milken “philanthropic” foundation that hired National Cancer Institute prostate cancer chief Alison Martin after she helped the chairman of Milken’s Therapeutic Consortium foil Dendreon’s FDA application. Leon Black is also a business partner of Felix Sater, the alleged Russian mobster who once stuck a broken stem of a wine glass through a stock broker’s face and then went on to run White Rock Partners, a Mafia-infested brokerage that was indicted for manipulating stock in cahoots with the above-mentioned Lindsay Rosenwald’s D.H. Blair.

    Prior to starting his own hedge funds, Balyasny was the top trader at an outfit called Schonfeld Securities, the proprietor of which is a man named Steven Schonfeld. Prior to founding his firm, Schonfeld worked for Blinder Robinson (then known on the Street as “Blind’em and Rob’em”). Blinder Robinson was among the first firms to be shut down by the Feds when they began investigating a network of Mafia-linked brokerages that included Rosenwald’s D.H. Blair and Sater’s White Rock Capital.

    Schonfeld worked at Blinder Robinson with Anthony Elgindy, the criminal naked short seller who was was later sentenced to prison for stock manipulation and bribing FBI officials. As you will recall, Elgindy appeared for his sentencing missing a finger – reportedly because the Russian Mafia forced him to saw it off, giving him something on which to meditate while he served his 11 years in jail. Meanwhile, the Elgindy investigation led the authorities to other hedge funds, such as Gryphon Partners, whose manager was later among the few who bet big against Dendreon.

    As should be clear by now, it is significant that a preponderance of the hedge funds that bet big against Dendreon, and a preponderance of the hedge funds that were invested in the three Milken-promoted companies – Cell Genesys, Novacea, and Cougar Biotechnology – were part of the same network. And it is significant that much of this network seems to be centered on Michael Milken and Steve Cohen, who became the “most powerful trader on Wall Street” some years after he was investigated by the government for trading on inside information provided to him by Milken’s shop at Drexel Burnham.

    Permit me to repeat a few facts:  Cohen was once the top earner for Gruntal & Company, which was simultaneously employing several traders who were later tied to the Mafia. When Gruntal was indicted for embezzling millions of dollars, many of its former employees went on to fill the ranks of  White Rock Capital, run by the alleged Russian mobster Felix Sater (he with the broken wine glass).

    Cohen, meanwhile, had left to start his own hedge fund empire. Cohen’s hedge funds have helped pump stocks promoted by D.H. Blair, which was eventually indicted on 173 counts of securities fraud and implicated in a Mafia stock manipulation scheme that was orchestrated by White Rock Capital.

    Lindsay Rosenwald, who is the son-in-law of D.H. Blair’s founder and a former top executive of D.H. Blair, was not only the controlling shareholder of Cougar Biotechnology, but also the proprietor of a hedge fund called Paramount Capital. The vice president of Paramount was formerly a top trader for Steve Cohen’s SAC Capital. The vice president of the above mentioned Millennium Management is also a former top trader of SAC Capital.

    And Cohen, who is maniacal about his working relationships, is on close terms with Schonfeld Securities, run by the former employee of Blind’em and Rob’em.  Cohen has employed Schonfeld’s traders, including Anthony Bassone, who was until recently assistant controller of SAC Capital; and Rob Cannon, who is Cohen’s top personal trader at SAC. Another “Russian whiz kid”, Michael Orlov, created the computerized trading infrastructure at both SAC and Schonfeld Securities. And, as mentioned, Cohen shares employees and trading strategies with that other “Russian whiz kid” — Dmitry Balyasny, who was once Schonfeld’s biggest earner.

    All of which I mention only because I fancy myself a biographer of a particularly destructive network of Wall Street personalities. It may be of no significance that out of Planet Earth’s 11,500 hedge funds, there were only ten hedge funds with large numbers of Dendreon put options at the end of March, 2007.  There may be no significance to the fact that of those ten hedge funds, seven were in the same network — Millennium Management; Balyasny Asset Management; WS Capital (the successor to Gryphon Partners); Perceptive Advisors (whose manager was simultaneously working for Paramount Capital); Bernard Madoff Investment Securities; Pequot Management; and SAC Capital (managed by Steve Cohen, who is said to be maniacal about maintaining working relationships with people in his network).

    And it could be purely coincidence that these hedge funds were the largest holders of put options on Dendreon shares right at the time that Dendreon was getting clobbered by massive amounts of illegal naked short selling – and right before Dendreon’s treatment for prostate cancer was stymied by an unprecedented lobbying effort led by FDA-contracted doctors and government officials tied to Michael Milken.

    By the way, three months later – at the end of June, 2007 — there was just one more hedge fund with large numbers of Dendreon put options. It is not clear from SEC filings whether these put options were bought before or after the FDA announced (on May 8, 2007) that it would  not approve Dendreon’s treatment.

    Either way, it is probably another coincidence that this eleventh hedge fund that bought large numbers of put options was the above-mentioned Magnetar Capital.

    * * * * * * * *

    To be continued…Check in soon for Chapter 15.

    This post was written by:

    - who has written 87 posts on Deep Capture.

    Contact the author

    52 Responses to “Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 14 of 15)”

    1. Tom Vallarino says:

      Mark, I am in awe of the detailed work that you have done to stitch the crime together and naming the names. Especially in light of the fact that these criminals have decades of experience in hiding their activities.

      And perhaps that’s their downfall. Perhaps they’ve been around and at this for far too long. In any case, my hat is off to you. Great job. I hope it reaches mainstream. I have certainly done what I could to alert other media including to European publications. Perhaps they’re not captured and will spread this far and wide.

      But sadly, I would not be surprised to see a successful effort on the part of captured Wall Street and DC folk kept the lid on this. In this too they have much experience their tentacles go very deep. For those reasons, I can only see a state ballot initiative that rewrites the UCC section 8 as having any hope of achieving any real change to the U.S. securities market.

      Anyone have inns with the BBC?

    2. heyjude says:

      Greed is what has plunged our country into this mess we are in.

      ~ Hell has three gates: lust, anger, and greed ~
      Bhagavad Gita

    3. Tom Vallarino says:

      A suggestion if I may:

      In the future, I would like to see proposed solutions appear here at DeepCapture. DeepCapture has established enough crimes now. Realistic solutions need to be worked on…..Either we solve this problem to a great degree, or we are toast as a 1st world nation. We need to actually do something besides talk about it. I’m afraid PR, writing, talking and complaining alone will not get us where we need to go.

      • harveydawabbitt says:


        i personally think nothing will change no matter what congress says or does.
        we are going to have to take matters into our own hands in order for us to get this solved.

        how many of us are willing to take that step?
        i am.

        • Solomon MacKay says:

          If the people of the US would stop voting for anyone from the two major parties, and also not vote for them for the next thirty years, even if they change parties, much would change. The concept of “corporate person hood” should be addressed and altered.

    4. akcje says:

      Mitchell > Gottleib, the co-owner of Visium, is something of a mystery man. I have been able to find little information about his background.

      Perhaps because you got the name wrong?

      • deepthroat says:

        What relationship does Jacob Gottlieb have to Dr. Scott Gottlieb of FDA?


        Wednesday, August 24, 2005 – Page updated at 12:00 AM

        E-mail article Print view
        Wall Street biotech insider gets No. 2 job at the FDA

        By Alicia Mundy

        Seattle Times Washington bureau

        Only a month ago, Dr. Scott Gottlieb was a Wall Street insider, promoting hot biotech stocks to investors.

        Now Gottlieb holds the No. 2 job at the Food and Drug Administration (FDA), the federal agency that approves new drugs, oversees their safety and affects the fortunes of companies he once touted.

        Wall Street likes the appointment of Gottlieb, 33, who believes in faster drug approval and fewer news-release warnings to the public about potential side effects of drugs.

        But some medical experts are shocked by his July 29 appointment, coming at a time when the public is increasingly concerned about the safety of popular medicines. In addition, the federal government has just begun scrutinizing the growing financial ties between Wall Street firms and doctors researching new drugs.

        Gottlieb’s new job “further impedes the independence of the FDA,” said Dr. Jerome Kassirer, former editor of The New England Journal of Medicine. “Gottlieb has an orientation which belies the goal of the FDA.”

        “I’ve never heard of anything like this,” said Merrill Goozner, a director at the liberal Center for Science in the Public Interest.

        “If he’s had dealings regarding companies whose products are up for review at the agency, it strikes me as a potential conflict of interest. You want a barrier between the regulated and the regulators. It’s fundamental,” Goozner said.

        A half-dozen current or former officials at the FDA say they do not know of anyone from Wall Street moving directly into such a high-level job at the agency.

        Until last month, Gottlieb was editor of a popular biotechnology investor newsletter, Forbes / Gottlieb Medical Technology Investor. Forbes touted Gottlieb’s stock-picking success on its Web site in mid-May:

        “Special Offer: In the last few months, Dr. Scott Gottlieb recommended two cancer cure stocks to subscribers that have already climbed 38%. Click here for the latest report from Forbes / Gottlieb Medical Technology Investor, ‘Three Biotech Stocks To Buy Now.’ ”

        Now, as one of three deputy commissioners, Gottlieb will help oversee such major policies as the FDA’s fast-track approval process for drug and biotech products, a priority for many Wall Street funds and the pharmaceutical industry.

        Gottlieb said he has cut his ties to Wall Street and discontinued his newsletter. He doesn’t see a conflict between that work and his new role as a high-ranking regulator.

        “What I learned while working on Wall Street has informed almost everything that I have done since, but especially my work in the government,” he responded in an e-mail to questions from The Seattle Times. (The FDA would not allow the Times to interview Gottlieb or provide answers to questions about his background. The FDA has not released his financial-disclosure forms.)

        “[It] has helped me appreciate where regulatory policy can be improved upon to help enable medical innovation and to turn scientific breakthroughs into practical medical solutions that can help patients.”

        Gottlieb was an analyst for a Wall Street investment firm before going to Mt. Sinai School of Medicine in New York. He earned a medical degree in 1999, then did an internal-medicine residency. From 2003 until a few weeks ago, he saw patients during weekend shifts two or three times a month at Stamford Hospital in Stamford, Conn., he said.

        Since becoming a physician, he has worn many hats. From 2000 to 2002, Gottlieb wrote the Gilder Biotech Report, an investment newsletter, reporting on potential FDA decisions, drug and biotech developments. He also worked as a staff writer for the British Medical Journal.

        In 2003, he was a full-time resident scholar working on FDA policy issues at Washington, D.C.’s most formidable conservative think tank, the American Enterprise Institute (AEI).

        Along the way, he became a leading proponent of doctors increasing their income by selling their understanding of drugs and the federal regulatory process to stock analysts and investment firms — “Moving your Career from Main Street to Wall Street,” as Gottlieb wrote in an investment column in the American Medical Association newsletter.

        He joined the Food and Drug Administration in March 2003 as a senior adviser on policy and soon made an impression. Later that year, the SG Cowen brokerage house sent a report to subscribers, “A Recap of What’s Gone Right at the FDA,” that praised Gottlieb and other new FDA officials under then-Commissioner Dr. Mark McClellan for working to streamline the drug-approval process.

        “Should McClellan’s team succeed in getting their strategies adopted into the framework of the approval process, the team’s impact on FDA policy could last well beyond the current administration.”

        Gottlieb moved with McClellan, brother of White House spokesman Scott McClellan, to the federal Centers for Medicare & Medicaid Services in June 2004 and left that October.

        He then returned as a full-time scholar at the AEI and started the Forbes / Gottlieb Medical Technology Report.

        Gottlieb, a Bush administration appointee making about $140,000, comes to the FDA with an agenda. In addition to advocating faster drug approvals, he has complained the FDA sends out too many “shotgun warnings” on any particular drug’s emerging side effects, which he said may cause patients to overreact.

        He wants the warnings to be sent to doctors first, and without “overstating a product’s risk.”

        He also has urged that the FDA change longstanding policy and release data on experimental drugs at different stages of the research, from animal tests to final patient studies.

        Releasing more data at each stage would help investors put money behind promising drugs and products earlier and would better protect patients in the clinical trials, he has explained.

        Three years ago, Gottlieb wrote about an issue that was spotlighted last month in a Seattle Times investigation — the practice of doctors leaking details of ongoing drug research to investment firms, which can then profit from the information by selling or buying stocks.

        The Times found 26 cases in which doctors leaked confidential and critical details of their ongoing drug research to Wall Street firms. The report has led to a Securities and Exchange Commission investigation.

        “Traders will go to great lengths to get market signals from medical researchers,” Gottlieb wrote in Barron’s, an investor publication, “and the tight lid the FDA keeps on clinical-trials data has spawned a thriving niche of boutique investment-research firms that link money managers with medical experts capable of giving investors a wink and a nod.”

        Gottlieb is against such leaks. But he did not call for better enforcement of confidentiality agreements that should preclude such behavior. He instead urged that the FDA open up its drug-approval process to investors and the public.

        “Bizarre FDA rules allow companies to hide clinical information practically in perpetuity. Something needs to change,” he wrote in the Gilder Biotech newsletter in 2002.

        “The FDA could and should release data contained in a company’s (FDA) filings at each stage in the process. … Why shouldn’t markets know what bureaucrats and insiders do?”

        Kassirer, the former editor of The New England Journal of Medicine, said early release of clinical-trial information “strikes me as potentially good for investors but bad for the validity of clinical research.”

        “Releasing data early could result in premature and erroneous conclusions about the drug or device being tested, premature ending of clinical trials and even inappropriate enrollment of patients,” he said.

        The FDA would not comment on Gottlieb’s ideas on changing policy to allow for earlier release of clinical trial information, except to note that the articles were written before Gottlieb joined the agency.

        He also has consulted for, and written positively about, a major matchmaking firm that links doctors with Wall Street investors, the Gerson Lehrman Group in New York.

        He has known founder Mark Gerson for several years, and both are part of the conservative establishment in D.C. With his pro-market views “Scott is popular with some people at the White House,” said Robert Goldberg of the Manhattan Institute, a conservative think tank. He is a friend of both men.

        Gottlieb highlighted Gerson’s firm in investment columns he wrote for the AMA newsletter, and encouraged doctors to join Gerson’s network and others. Not only can doctors increase their income, but they can help Wall Street investors decide which new technologies to put their money behind, he wrote.

        Gottlieb said by e-mail that he was not paid to recruit physicians for Gerson’s group. He added he had recommended a handful of policy-makers to Gerson Lehrman and was paid for probably fewer than eight hours of work.

        Gottlieb said he also did a little work for the SG Cowen brokerage house but has not taken part in any conference calls between drug researchers and investors discussing ongoing clinical research.

        When the FDA announced Gottlieb’s hiring last month, it noted Gottlieb had been a practicing physician, a scholar at AEI and correspondent for the British Medical Journal. The agency did not mention Gottlieb’s stints as editor of the two popular biotech investment newsletters or his work with Wall Street firms.

        Alicia Mundy: 202-662-7457 or amundy@seattletimes.com

        Researcher Gene Balk contributed to this report.

        Copyright © 2005 The Seattle Times Company

    5. Krapbuster says:

      Loyal Dendreon long investors did 2 years of homework ourselves since May 2007’s mess, and were successful in exposing Jonathan Ashcoff (Brean Murray), Matt Herper (Forbes) and several other key Wall Street shorts back in January thru March 2009 timeframe. We did such a thorough & great job that Yahoo illegally removed our member ID’s to stop our voice while allowing the numerous (Milken led) hedge fund ID’s to continue spewing lie after lie to promote their charade.

      Thank you for your dedication to put Deep Capture together for all investors to see the truth in how the Milken Institute plays unfair. We fully expect the Obama led FDA to approve Provenge in 2010 where the Bush led FDA in 2007 dropped the ball. As for Michael Milken foundaion let’s hope they lose a lot of clout on this charade they played out.

      • Kilroy.Killbasher says:

        Krapbuster, regarding your Yahoo message board comment, there seems to be a pattern industry-wide. Both InvestorsHUB (IHUB) and Raging Bull message boards will actually BAR SHAREHOLDERS from talking on their own stocks boards, even though they have not violated terms of service. Yet, the paid basher network (non-shareholders) are NEVER barred even though they constantly violate the rules.

        I know some have written email after email to Raging Bull’s “admin” asking for their reason for blocking shareholders for merely posting opposing views or bringing up incriminating evidence of some of their 24/7 bashers (such as Janice Shell), yet they didn’t even respond to one of them. Some wrote customer service at eSignal, who owns Raging Bull. They responded, but merely referred them back to Raging Bull admins.

        These miscreants are firmly entrenched in the financial message boards, and apparently they hold the puppet strings to all (or at least many) of the board moderators.

    6. Anonymous says:

      Ginger. Nice work re the links you provided in segmant. The problem though is that those MSM have been told often. I personally have sent info to the majority and in fact hand delivered the info to one of theres back in Jan 09. Cavuto and Beck have had Patrick on but it’s more of a bring a guest on versus really listening and then going deep to do something. And that is the key, UNTIL we do something then it’s the same ol same ol. The new president skirted the question today re what is going to be done re regulation. Unfortunately that’s the problem. Lots of rhetoric and NO action: AKA LIP SERVICE. Thanks for you hard work.

    7. Anonymous says:

      HeyJUDE. Although there were many who were greedy that were part of the CAUSE. The fact is there were too few who had the courage to stand up, and expose the fact that the system became victim to ABNSS. That is what caused the plunge. The failure of those in position to simply STOP IT.

    8. kyoto27 says:

      Yes Mark, if only there was a pattern….
      And to think that Pre-Deepcapture…many of us believed the mainstream media, the SEC, our politicians were just stupid in not knowing that the Milkmen and the Madoffs were running billion dollar scams in broad daylight. Now we know that they know or knew what we know now and just let it go on and on again and again and again. At least now they know that we know that they are totally corrupted and captured by power & money and not by some spirtual revelation or calling.

    9. ron doc says:

      I am afraid the unfortunate fact is we have no honest people let in power antwhere who will help us in any of this.

      Lawlessness has been bought and paid for, and there are no leaders left. Just the smoking, corrupted hulk of a dung pile of what were formerly some idealistic people who came into power to help the population. Most now are just whored up on dirty cash and have sold us out.

      God help them!

      • huck says:

        Pretty well let the cat out of the sac now Mark. You going to expose some of our exacted leaders corruption in ch 15? Is that another series to be released later? Oh well. Most blind sheep will continue sucking the pablum, spoon fed them through the media anyway. Gott help us all.

    10. SueRae says:

      Dendreon investors have been convinced for years that criminal activity was behind the stocks demise in 2007. There are several groups who have dedicated themselves to exposing the truth. My hats off to Mark Mitchell and Patrick Byrne for the exhaustive research in putting together this expose. It is amazing that after 14 chapters and likely hundres of phone calls and letters, that very little of this story has been talked about on the mainstream media. Their silence speaks volumes. I don’t know how or when this story will get in front of the FBI where it belongs. This is the most blatant RICO case I’ve seen. What we do with this story is going to be up to us. Our work is just beginning. Thank you gentlemen, for giving voice to the retail shareholder and to those men long gone because of the actions of a greedy few.

    11. RandR says:

      Where is our modern day Elliot Ness to break into the spot light? Please tell me that there is somebody in DOJ listening who has the guts to stop this criminal activity once and for all!

    12. Anonymous says:

      I wonder if Milken will be tied to this?

      Two N.J. Mayors, Rabbis Among 30 Arrested In Corruption Probe

      By Mark Memmott

    13. Curt says:

      Excellent work… any chance you give a detailed report as to who in Gov’t you gave this work to and what, if anything, is being done about it? Seems the FBI should be working overtime on corruption charges at the SEC, FDA , a few brokerages, just to name a few.

    14. sean says:

      Opinions please..

      7 senators endorse ID scheme to limit short sales

      Wed Jul 22, 2009 8:16pm EDT

      WASHINGTON, July 22 (Reuters) – U.S. securities regulators should ban short selling unless a broker first obtains a unique identification number for specified shares, possibly from a centralized system planned by the Depository Trust and Clearing Corp, a bipartisan group of seven senators said on Wednesday.

      The SEC has been considering new restrictions on short selling, in which an investor bets on a stock’s decline. Some lawmakers and investors contend that short sellers worsened the financial crisis by driving down stock prices but short sellers argue that their trading helps keep markets liquid and prevents stocks from becoming overvalued.

      In a letter to Mary Schapiro, chairman of the Securities and Exchange Commission, the senators said their proposal would be “a substantial improvement” on current short-selling market practices.

      Existing SEC rules allow any short seller to review a list of stocks available to borrow, then sell short. But the list can turn out to be inaccurate or the shares are unavailable in time for settlement, often because the same shares have been claimed by other sellers for potential short sale executions.

      “The Depository Trust and Clearing Corp proposal could standardize requirements across the industry, can be configured in a way that will not disrupt markets, would streamline locate documentation requirements, and can be overseen directly by the SEC to ensure regulatory compliance,” the senators’ letter said.

      Democrats Ted Kaufman of Delaware, Carl Levin of Michigan, Jon Tester of Montana, Sherrod Brown of Ohio and Robert Menendez of New Jersey signed the letter, along with two Republicans, Johnny Isakson of Georgia and Orrin Hatch of Utah.

      An SEC spokesman declined to comment directly on the letter’s proposal. ” We share the senators’ interest in effective protection against abusive short sales,” the spokesman said.

      In a short sale, an investor borrows stock and sells it in the hope that its price will fall. If the price does drop, the seller profits by buying the stock back at the lower price.


      * SEC eyes short sale curbs, traders irked [ID:nN08529569]

      * SEC asks if options undermine short curbs[ID:nN10549060] (Reporting by Julie Vorman; Editing by Gary Hill))


      • Tom Vallarino says:

        I think it is an excellent step in the right direction. But there are many ways even I can think of to go around it when targeting a particular security. Most importantly, there are no penalties for making “mistakes”. Just like there are no penalties for violating delivery and settlement requirements.

        Even if this system is 100%, one could simply sell outside the DTCC to without a pre-borrow and nobody would know about it. Desking trades or prime brokers not settling trades for buy orders that flow through them, would cut out the DTCC. There are a million ways to do this.

        In the end, to make this crime pay, there must be a victim who is robbed. The victims are long investors with real money take from their accounts in exchange for fake securities. And here is where state laws can kick in, because they govern accounts and the transfer of securities. If criminals are found to be violating state laws, by treating accounts or transferring securities in unlawful ways, these Wall Street firms could be put out of business by having their state license revoked.

        The only new federal laws that I would be impressed with would be ones that include mandatory penalties for violators without discretion. Beyond that, new laws are not even necessary. The legal requirement to deliver shares as contracted, already makes it incumbent on a short sellers to make sure they borrow the shares they sell.

        But there is no penalty or mandatory enforcement. The devil is in the details.

        The quickest way for the concerned Senators to effect change on the federal level – is not to meddle with the details of trading, settlement or short selling as the pros and criminals will out think them there – but to think of mandatory penalties and how to ensure that violators of the settlement rules are penalized automatically and repeat violators are banned from the securities industry.

        By this I mean entire firms as one can not blame settlement violations on individuals within firms. All individuals are supposed to be supervised by higher ups and all within the firm participate in the earnings of the crimes.

    15. Reg says:

      I haven’t been getting RSS updates for months now, so I decided to check and copied the link afresh from http://www.deepcapture.com. Sure enough, my RSS agent (I use iGoogle’s one) can’t add it.

      Just thought whoever runs this site should check cause I’m sure a lot of people have been keeping up to date through RSS notifications.

      I’ve tried posting this at the forum but it says I need to become “more active”.

    16. ron doc says:

      All we get is SEC pretending to be getting ready to do something. Moving the pieces around on the board, day after day, week after week, month after month, year after year….Nothing actually happens to help the victims of the criminal actions and the SEC pukes leave and get thier later day pay offs for dirty deeds rendered for the criminal scum.

      Nobody in Goverment or law enfocement will do anything that really stops the theft even though yhet already have the laws needed if only they wern’t so whored up on dirty pay off favors.

      God won’t help them if they keep it up. God will crush them in his eventual wrath. The only question is will some face human wrath first?

    17. ron doc says:

      Light poles to be used as oak tree substiutes before too long?

      From:http://jsmineset.com/….He can see what is coming?

      Jim Sinclair’s Commentary

      Setting aside $74 billion for bonuses and raises while even the official US unemployment figures put approximately one out of every ten people out of work is looking for real trouble.

      This illustrates the rank madness of the sociopath financial industry when the final cost of bailing out the super-rich is going to be $17 trillion to some official estimate of $27 trillion tax payer dollars. This is the stuff history says revolutions were made of.

      Wall St. Jacks Up Pay After Bailouts
      Lawmakers Warn Against Return to Pre-Crisis Levels
      By Tomoeh Murakami Tse
      Washington Post Staff Writer
      Thursday, July 23, 2009

      NEW YORK, July 22 — Wall Street’s biggest banks are setting aside billions of dollars more to pay their executives and other employees just months after these firms were rescued with a taxpayer bailout, renewing questions about compensation practices in the aftermath of the financial crisis.

      The recent outcry over bonuses at bailed-out firms prompted public alarm and promises of reform from financial leaders, who acknowledged that pay and bonuses should not reward risky short-term business decisions — such as those that contributed to the meltdown — but instead longer-term financial performance.

      But Wall Street, helped by improving profits, is on track to pay employees as much as, or even more than, it did in the pre-crisis days. So far this year, the top six U.S. banks have set aside $74 billion to pay their employees, up from $60 billion in the corresponding period last year.

      The increase in set-asides for employee pay has raised the ire of Washington, where lawmakers denounced financial leaders for returning to old habits and vowed to enact measures governing executive compensation.

      “It strengthens our commitment to getting legislation passed,” Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, said in an interview Wednesday, adding that a committee vote on a bill to increase oversight of Wall Street pay has been scheduled for Tuesday. “The amounts are troubling.”


    18. harveydawabbitt says:

      what happened to dr decostas posts?

    19. jay28w says:

      Great series of articles. Thank you to the author for the efforts to expose the corruption, and, hopefully assist in getting this drug to the market.


    20. sean says:

      This could be interesting..

      Senator Ted Kaufman To Appear On Jim Cramer’s Mad Money Tonight

    21. Feedchipper says:

      Harvey, Dr. DeCosta was given his very own discussion area in the Deep Capture forums. He has apparently chosen not to acknowledge the kind gesture or make use of the opportunity, which is, to borrow Patrick’s term, odd. Personally I’ve often thought that Dr. DeCosta’s endless verbiage provides more obfuscation than illumination of the subject anyway.

    22. iStandUp says:


      Dr. Jim DeCosta posts are at the bottom of the discussion of the previous Chapter – Chapter 13:


      Click on the link above and scroll down to the bottom of the page.

    23. iStandUp says:


      When was the last time you posted in the DeepCapture Forum?

      Or maybe the question should be – Have you ever posted to the Forum?

      And if you have never posted or rarely have posted in the forum, should I say of you –

      “[Feedchipper] has apparently chosen not to acknowledge the kind gesture or make use of the opportunity [to post in the new forum], which is, to borrow Patrick’s term, odd.”

      Patrick has not dictated that you, or I, or Dr. Jim DeCosta MUST ONLY post in the DeepCapture Forum. This is American the land of freedom. You have the freedom to post anywhere you want. I have the freedom to post anywhere I want. And Dr. Jim DeCosta has the freedom to post anywhere he wants.

      Feedchipper, I think the solution for you, I and everyone else here is very simple. If any of us finds the explanation given by another person in DeepCapture unacceptable for any reason, such as, the grammar or vocabulary or ideas are unintelligible, then simple don’t read it, skip over it, and go to the next post of interest.

      Personally I think that it is wonderful that Dr. Jim DeCosta is willing to spend time here in DeepCapture.com, and willing to answer questions from me and others who want to understand the legal side of Naked Counterfeit Short Selling.

      If you are not interested in the legal side of Naked Counterfeit Short Selling, that is OK. Simply skip over it.

      I have more questions for Dr. Jim DeCosta and will be asking him even more questions, since I see him as an extremely valuable contributor here. You can choose to just skip over them, or not. It is your choice.

    24. KDDublin says:

      If this matter is not already being investigated by the SEC and DOJ than the investigators need investigating!

      There is an “I” in investigation.

      Bring back Gary Aguirre!


    25. e pluribus corruptus says:

      Anybody notice the link between all of the corruption being constantly exposed in New Jersey (44 busted yesterday) and the fact that almost all market makers operate out of Jersey City? A big “PIPE” financier famous for arguing how swell PIPE financiers are is also going down in flames. “If only there were a pattern”.

    26. Feedchipper says:

      IStandUp, I am pleased to report to you that I have posted on the Deep Capture forums. I will let you discover on your own how often and how recently I have posted there, should you ever decide to avail yourself of that resource.

      I’m curious though, with America being the land of freedom and all… how do feel about posters copying and pasting long articles in their entirety here in these comments sections? Often these articles are unrelated to the subject of the original Deep Capture article. Should anyone be allowed to deposit thousands of words here, making the comments section a mile long, just because they feel like doing so?

      As I recall, Dr. DeCosta has even resorted to copying and pasting his long missives in multiple comments sections here on Deep Capture. Is this also fine by you?

    27. sean says:

      Feedchipper, IStand, we are all on the same team. Peace!!!

    28. pontiyak says:

      Excellent and enlightning investigative reporting by Mark….

      The highest powers MUST Federalize the FED and the DTCC…

      Or at least storm the place and take them over.

      No more “for profit” entities registered in Puerto Rico…

      Bring back Paper Certs or find a way to publically track every single share and it’s pedigree. Give companies and their shareholders a way to out the NSS.

      Clearly the currents powers that be are both captured, and have their hands in the cookie jar.


    29. iStandUp says:


      Excellent observation:

      “Feedchipper, IStand, we are all on the same team. Peace!!!”

      For the record, I have never posted on the Deep Capture Forum. And I know how to skip a posting whenever I fell like it.

    30. Jim Hall says:

      The ‘flash’ trade. Long investors’ newest nightmare:


    31. iStandUp says:


      Thank for the link to the story about the 7 Senators letter to the SEC!

      Here is a key paragraph in the Senators letter:

      “We urge the SEC to consider crafting a rule that prohibits short sales that do not first acquire a “hard locate” of specified stock shares. The rule should also

      (1) define the required elements of the short seller’s demonstrable legal right for timely receipt of the decremented shares from the lender, which attaches to the evidence of a unique confirmation number;
      (2) impose an equivalent (or even stronger pre-borrow) requirement on short sales that do not use a “hard locate” system; and
      (3) impose tough penalties on the executing broker for a short seller who fails to deliver stocks at settlement.

      We further request that the SEC report to us on whether it has sufficient authority to enforce compliance with such a DTCC system, as well as to require periodic audits of the DTCC system by the SEC, including public reports of brokers guilty of multiple violations. Such rules should sharply curtail if not end naked short selling. Most importantly, the SEC would finally have an enforceable system.”

      See the complete letter signed by 7 Senators here:

      ( http://kaufman.senate.gov/press/press_releases/release/?id=58553367-af70-47f7-8308-d9ab25ae0842 )

      I think this is part of the proposal is critically important:

      “to require periodic audits of the DTCC system by the SEC, including public reports of brokers guilty of multiple violations.”

      The DTCC proposed this new hard locate system, but I do not think they are in favor of “periodic audits of the DTCC system by the SEC, including public reports of brokers guilty of multiple violations.”

      I think this proposed system is a step in the right direction, but as pointed out by Tom above, all the loopholes would have to be closed to make it airtight.

    32. Dr. Jim DeCosta says:

      The efforts of those of you that live in a state whose elected officials are members of the House Financial Services Committee and the Senate Banking Committee might be especially fruitful in regards to getting Mark’s investigative reporting work in front of them. At the end of the day getting re-elected is their job #1.

      • harveydawabbitt says:

        DR. Decosta,
        I have personally put deepcapture in fromt of my senator cantwell. also the state attorney general,dept of financial institutions securities division, various other government folks that merely had gov at the end of the e-mail addresses.
        i get canned responses in return that seem to have little or nothing to do with what i have submitted to them.
        i have talked to local law enforcement to see if i could file a formal criminal complaint. only to be told it isnt their job.
        maybe i am impatient because i want to know what the hell happens to the stuff i send to them. i want to be involved,it drives me insane when i get stonewalled.
        i sound like a frikken broken record. but its true no one here in washington state appears to give a rip. what does a fella do?
        none of the local news stations seem to give a rip either.
        the one time i got someone to respond was a reporter for a seattle mewspaper. i think it was the post intelligencer cant remember. that fella was a guy named desilver
        he seemd to be on the dark side any mention of patrick or overstock and he got flustered. i tried to get him to run some stories about nss. he was one of those who think nss is a conspiracy thing. although when an article would come out about nss i would send it to him and ask ready to concede now?
        at one point i pissed him off enough for weisshole to write something about it.lol i forget what it was.
        bottom line is after many many many attempts to get folks to even look at the problem we have on wall street and our regulatory agencies,has been futile.
        what do you do when you have wracked your brain trying to think of every angle you can to get folks to approach the subject?
        frustrating as hell. ya know what i get alot? i share an article about nss or about how bear was taken down with folks and they all tell me it is to complicated , or that goes over their head, or bullsh*t you’re an idiot.
        or they just ignore it altogether.
        ok im done griping.


    33. AMMASS says:

      Mark Mitchell,
      At the end of the DNDN C/C on 3/29/07 ,Joel SENDEK of Lazard mumbled that “this is not the way we heard ,it was going down ” or words to that effect(i.e. the AC of the FDA’s favorable vote on Provenge and therefore its expected Approval.) All I want to know is “who” it was that Sendek was refering to when he blurted -out that we were told differently wrt the AC vote. WAS it Pazdur or someone else at the FDA ,perhaps von Ecshenbach ,or perhaps MILKEN who got his info from von Ecshenbach and then passed it on to his consortium of NSS HFs? THIS is really important and must be investigated if not a supoena issued to Sendek to get the ANSWER,for that will bring this entire conspiricy home, and resolved imho.

    34. taxmantoo says:

      Mark, the Prostate Cancer Foundation is just keeping up with its mission of preserving prostate cancer.


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    At the time much of the content on DeepCapture.com was written, the Great Financial Crisis of 2008 was either on the verge of happening or had just occurred. In those days, emotions among this publication’s contributors were raw and, in an effort to get their warnings noticed and appropriate blame placed, occasionally hyperbolic language and shocking imagery were employed.

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