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Pluristem (PSTI) Patterns Of Hype, Omission, Ethics For A $32 M Financing And Now The Expected Tail-spin

A "Strong Sell" as the SEC must take a view of PSTI's "shooting from the hip"…

A patients, a 7 year-old Patient M<girl> with a bone- marrow disease, died 4 months after PSTI said her life had been saved!

I have made periodic reference to their over-inflated press releases as … "opinion or statements of belief" posts … which were "pooh-poohed" by many!! U.S. securities law requires companies "to disclose information that a reasonable investor would consider important when deciding whether to buy, sell or hold a security."

PSTI stock doubled in NASDAQ trading from May through September, helped by 3 news releases announcing that patients' lives had been saved by injections of their experimental stem cells.However, PSTI has … still has made no announcement of the girl's death, which was reported by the Israeli newspaper Globes on 10/9 with an attribution that PSTI … " doesn't follow patients after they are released from the hospital and wasn't obligated to report the girl's death".

After the stock soared on the positive news … 2 top executivesprofited by selling shares at the highest price in more than 4 years … "as part of a pre-determined program". <11 days later, on 8/17, Aberman sold 33,853 shares at $5 each, the stock's highest intraday price since 5/1/08, for proceeds of about $169,295, and CFO Yanay sold 16,927 shares the same day, for almost $85 K.> When the first of those patients, a 7-year-old girl with a bone- marrow disease, died 4 months after PSTI said her life had been saved, CEO Aberman … was silent … PSTI raised $34 M selling shares a week later.

The Bottom Line: SEC experts say that it could all fall into a regulatory gray area, but bioethicists had no trouble assessing the situation. When it comes down to right and wrong, PSTI is wrong. U.S. securities law requires companies "to disclose information that a reasonable investor would consider important when deciding whether to buy, sell or hold a security," said John Nester, a spokesman for the SEC. "Material statements by companies have to be accurate and not misleading by commission or omission," he said. Nester declined to comment on whether the agency was investigating the PSTI matter.

I have been a frequent critic … and believe they should be investigated … as they have multiple … patterns of misleading investors! Selective reporting is ethically questionable … PSTI is down $0.68 or -18.43% to $3.01 and there more to go … downward… if these issues go forward by the SEC!

SEC experts say that it could all fall into a regulatory gray area, but bioethicists had no trouble assessing the situation. When it comes down to right and wrong, Pluristem was wrong.

PSTI has fallen 18.7% as of the 11/8 close from its 2012 peak on 8/16. Aberman and Yanay might be insulated <immune from subpoena and extradition> by being in Israel but, they still are a NASDAQ listed company with one company executive, Dr. William <Bill> Prather and his mouthpiece, Ray Dirks <with past SEC involvement> residing here! Executives felt no similar duty to report the girl's subsequent death, Aberman said, … because she died after having been released from the hospital and lived for 180 days after receiving the treatment, which is considered a success.

But what about the … I-Banks's and their analysts; Jefferies, Needham, Oppenheim and Maxim - did they not have a responsibility to inform the investors' pre and/or post the financing?? Much more to follow …!! Also, hats off to David Wainer, of Bloomberg!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.