SEC Sues Company That Claimed to Have
Breakthrough Cancer Treatment Alleging
Fraudulent Securities Offering That Targeted
Cancer Patients and Healthcare Workers.

Securities and Exchange Commission v.
Helvetia Pharmaceuticals, Inc., Richard A. Anders,
Nicholas Bachynsky, Arthur Scheinert, and Laurence Dean

Case No. 04-60804-CIV-JORDAN (S.D. Fla., filed June 21, 2004)
SEC Litigation Release No. 18756 / June 21, 2004

SEC The Securities and Exchange Commission (SEC) announced that on June 21, 2004, it filed a complaint against a company and four individual defendants for allegedly raising more than $3 million in a fraudulent, unregistered securities offering. The SEC's complaint names Helvetia Pharmaceuticals, Inc., Richard A. Anders, Nicholas Bachynsky, Arthur Scheinert, and Laurence Dean as defendants. The complaint alleges that defendants raised money by making fraudulent statements to investors that the money would be used to operate cancer treatment clinics.

According to the SEC's complaint, Helvetia was a Coral Springs, Florida-based company that purported to treat cancer patients using a unique, patented therapy using heat to destroy cancer cells. Helvetia, through Anders, Bachynsky, Scheinert and Dean, raised more than $3 million from approximately 50 investors from about January 2001 through at least August 2002, through the sale of unregistered Helvetia stock and promissory notes. Anders held himself out as Helvetia's president, Bachynsky was the company's medical director, Scheinert was Vice President and Dean was CFO.

The SEC's complaint alleges that the defendants used false and misleading information in Helvetia's offering materials distributed to investors to raise investor funds. Among other things, the SEC's complaint alleges that the defendants failed to tell investors that:

The SEC's complaint also alleges that the defendants:

The SEC's complaint charges Helvetia, Anders, Bachynsky and Scheinert with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 [15 U.S.C. §§ 77e(a), 77e(c) and 77q] and Section 10(b) of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]. Those sections and rules prohibit certain transactions in securities not registered with the Commission and prohibit fraud in the offer and sale, and in connection with the purchase and sale, of securities. The complaint charges Dean with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The United States Attorney's Office for the Southern District of Florida has indicted all four of the individual defendants for their role in the scheme. The SEC acknowledges the efforts of the United States Attorney's Office for the Southern District of Florida and the Federal Bureau of Investigation in this action.

This article was posted on March 16, 2004.