THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Cambridge’s Javelin is latest target of hoax

Man says fake release was meant to draw attention to security

By Todd Wallack
Globe Staff / June 23, 2010

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Cambridge-based Javelin Pharmaceuticals Inc. was the target of a hoax news release issued in its name over the weekend, at least the second such incident involving a US company in the past week.

It’s unclear who sent the phony release, which falsely claimed the biotech company won a 5-to-4 victory before the Supreme Court with the aid of Justice Clarence Thomas. Business Wire, a service that distributes company press releases to the media and investors, issued the Javelin release on Friday night, but retracted it at 7:45 a.m. Saturday.

Business Wire said the incident was the subject of a “criminal investigation’’ by the Federal Bureau of Investigation. FBI spokesman Richard Kolko did not immediately return a call seeking comment.

The hoax came less than a week after another press release service, PR Newswire, sent out a fake press release claiming President Obama had ordered a probe into General Mills Inc., a major cereal maker. In both cases, the releases were killed before they could affect the companies’ stock prices. And both included a New Zealand phone number at the bottom.

A man who answered the number yesterday identified himself as Matt Reed, a 30-year-old database designer from Auckland. Reed said he sent the General Mills release to discredit Obama (though he said he’s a fan of Massachusetts Senator John Kerry). And he said he sent the Javelin release to push Business Wire and other press release companies to step up their security to prevent future hoaxes.

“I wanted to put a bit of pressure on the news agencies,’’ Reed said. Reed said he submitted the Javelin release to Business Wire via e-mail — with his address disguised to make it look like he worked at Javelin. He also included his New Zealand phone number — explaining that he was on the road — and took a call from Business Wire to confirm that the release was authentic.

Reed said he didn’t pick Javelin for any particular reason — he just happened to stumble across the company’s name on an Internet message board and believed it to be vulnerable. He said he doesn’t own stock in either General Mills or Javelin and wasn’t attempting to manipulate their stock prices — though he noted Javelin’s stock price briefly jumped when it opened Monday. Reed said he has been contacted by the Securities and Exchange Commission, but not the FBI.

“It’s a concern that people are looking into it,’’ Reed said. But he added: “I am fairly confident that I should be able to deal with it.’’

To deter similar hoaxes in the future, Business Wire, a unit of Berkshire Hathaway Inc., vowed to immediately stop accepting customer press releases submitted via e-mail — something it had planned to do later this year. From now on, only authorized users will be able to submit releases through a password-protected online system.

Javelin did not return a phone call seeking comment. But in a statement, it said its e-mail system was not used in the hoax and law enforcement authorities had been notified. It also said it knew of at least two other companies that were victimized by phony press releases last week.

Javelin develops pain medications. Hospira, a specialty drug company, is in the process of trying to acquire Javelin through a tender offer for the company’s stock. Javelin’s stock closed at $1.40 a share yesterday, down 1 cent.

Todd Wallack can be reached at twallack@globe.com.