A reasonably healthy local economy has its benefits, but there's also a cost. A rising cost, in fact. In June, Seattle's 5. 8 percent inflation rate...
A reasonably healthy local economy has its benefits, but there’s also a cost. A rising cost, in fact.
In June, Seattle’s 5.8 percent inflation rate was the highest among 10 major metro areas, according to the number-crunchers at the U.S. Bureau of Labor Statistics (BLS).
How’d we get so lucky? Blame, or credit, goes mainly to the region’s economy, which is still running at a good clip — the jobless rate in June was 3.9 percent, versus 5.5 percent in both the state and nation as a whole. In addition, unlike many major cities, the housing market here may have fizzled but it hasn’t collapsed.
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Shelter (a category that covers both renters and homeowners) is the single-biggest component of the Seattle-area Consumer Price Index, accounting for nearly a third of its value.
Shelter costs rose 7.6 percent from June 2007 to this June; in Miami, which had the second-highest inflation in June, shelter costs were up just 4.8 percent.
Wallet-choking fuel prices don’t help, either. Unleaded regular cost 36.6 percent more at Seattle gas stations in June versus June 2007; nationally, gas was up 32.8 percent.
Want relief? Inflation in Detroit was just 3.0 percent in June, lowest among the BLS’ 10 cities. The trade-off, of course, is that you’re in Detroit.
— Drew DeSilver
CellCyte promoter is accused by SEC over another firm
A Canadian stock promoter who touted the shares of CellCyte, a Bothell biotechnology outfit that in late 2007 briefly boasted a market capitalization exceeding $400 million, has been accused by federal regulators of illegally reaping millions of dollars from the sale of unregistered stock in a different over-the-counter company.
The promoter, Gordon Brent Pierce, bankrolled a barrage of spam that lifted CellCyte shares past $7 in December; they now trade at around 40 cents.
The company disclosed in May that it faces a formal inquiry by the Securities and Exchange Commission.
The SEC announced Thursday its enforcement division has filed an administrative case against Pierce and an associate involved in Lexington Resources, an oil and gas company registered in Nevada.
The SEC proceeding alleges Pierce “coordinated an extensive promotional campaign” about Lexington through “spam e-mails, newsletters and advertisements on investment Web sites.”
The campaign resulted in Lexington’s stock jumping from $3 to $7.50 per share. Through an offshore bank, Pierce and his partners sold shares worth more than $13 million to the public between February and July 2004, even though the shares weren’t registered properly and Pierce didn’t file the required disclosure forms showing he controlled between 10 and 60 percent of the company’s stock, the SEC claims.
The agency invited a response from Pierce, a Canadian living in Vancouver, B.C. and the Cayman Islands, and the other man charged in the case, Lexington Resources’ chief executive, Grant Atkins, also of Vancouver.
An administrative law judge will hear the case within 60 days and rule whether Pierce and Atkins made any illicit profits they should surrender.
Pierce, who was banned by the B.C. Securities Commission until last June for misrepresentation and improper use of funds from a public offering in the 1990s, didn’t reply to a message left at International Market Trend, a stock-promoting company he owns in Bellingham.
Calls to International Market Trend’s Zurich-based affiliate and to Newport Capital, another Zurich firm linked to Pierce, went unanswered.
Pierce, who controlled a significant amount of CellCyte shares, is a defendant in a class-action lawsuit filed by shareholders after the stock plummeted in January. The fall came after articles in The Seattle Times described the stock-promotion effort and cast doubts on the published résumé of the company’s CEO, Gary Reys. CellCyte, also a defendant, has said it would “vigorously” defend itself against the lawsuit.
This past week, in another setback, CellCyte reported its patented technology to deliver stem cells to target organs was less proven than it previously claimed. The technology, licensed from the Veterans Administration, had been hyped in mailings funded by Pierce as “the most astonishing and important medical breakthrough in your lifetime.”
New V.A. data “does not demonstrate” stem cells ended up in the desired target organs, and further research is needed to learn if the technology works, CellCyte said.
— Ángel González
Comments? Send them to Rami Grunbaum: rgrunbaum@-
seattletimes.com or 206-464-8541