Rense: VeriChip Admits Failure to Disclose Implant Chip Risks

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Who wants to be chipped and tagged like cattle? Do you believe this

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Rockefeller's and the chip, and more...

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VeriChip Admits Failure To Disclose Implant Chip Risks

Oops! Did VeriChip Have A 'Senior Moment'?

By Katherine Albrecht

SpyChips.com

2-12-7

 

 

VeriChip Corporation, the much-hated purveyor of the VeriChip human

ID implant, is airing its dirty laundry this week. This is not by

choice, mind you, but because the Securities and Exchange Commission

(SEC) required the company to disclose its " risk factors " prior to

launching its initial public offering of stock (IPO) Friday.

 

The company lays out nearly 20 pages of risk factors in its Form S-1

Registration Statement, a required document for the IPO. But what

the company failed to reveal in its filing may be even more eye-

opening, say CASPIAN privacy advocates Dr. Katherine Albrecht and

Liz McIntyre. The pair, authors of the " Spychips " series of books,

have been vocal critics of VeriChip, dogging the company in recent

years and facing down its senior executives on radio and national

television.

 

" Potential investors should be told how a hacker can simply walk by

a chipped person and clone his or her VeriChip signal, a threat

demonstrated by security researcher Jonathan Westhues months ago, "

says McIntyre, who is a former federal bank examiner.

 

" Omitting the cloning threat from its SEC documents is a serious

oversight that could affect the value of VeriChip's stock. This is

materially relevant information, considering VeriChip's claim that

its product could be used to tighten security in facilities like

nuclear power plants, " she adds.

 

(For more on VeriChip's vulnerability to hacking, see " The RFID

Hacking Underground,' Wired Magazine,

http://www.wired.com/wired/archive/14.05/rfid_pr.html )

 

Verichip also failed to disclose to investors and the SEC that

patients' VeriChip implants might not be readable in ambulances.

VeriChip's chipping kit literature cautions that ambient radio

waves, like those in ambulances, can interfere with the equipment

that reads the implanted tags, but this important fact somehow

didn't make its way into the SEC filing.

 

(Scanned images of VeriChip's chipping kit literature, including the

ambulance caution, are available here:

http://www.spychips.com/verichip/verichip-photos-instructions.html )

 

Even with crucial information missing, investors may still find

themselves scratching their heads over poorly conceived aspects of

VeriChip's business model. " Anyone reading VeriChip's SEC filing

would have second thoughts about the stock, " says Albrecht. " Who,

after all, would invest in a company that expects patients to

document their own medical history and blood type in a database?

This could prove risky for anyone, not to mention the elderly,

Alzheimer's, and cognitively impaired patients that VeriChip is

targeting. "

 

She cites a passage from the registration statement that reads, " we

anticipate that individuals implanted with our microchip will take

responsibility for inputting all of their information into our

database, including personal health records. "

 

Other risks identified in the VeriChip filing could also scare

investors away. These include anticipation of ongoing multi-million

dollar loses, the " modest " number of people willing to get chipped,

public opposition, and the risk that the microchip may be found to

damage a person's health. The company also warns that it could be

subject to lawsuits and loss of confidence if its patient database

is unavailable in an emergency. The company admits that the database

has been unavailable in the past.

 

The market seemed to be catching on to some of these problems as

VeriChip began offering stock Friday in a bid to raise million of

dollars to fund its human chipping operations. Analysts noted

a " lukewarm reaction " to the stock and that it was trading on " the

low end of the expected range. "

 

To read the VeriChip Form S-1 Registration Statement (Amendment No.

7) see:

http://www.sec.gov/Archives/edgar/data/1347022/000119312507024937/ds1

a.htm

 

The VeriChip implant is a glass encapsulated RFID tag that is

injected into the flesh to uniquely number and identify individuals.

The tag can be read by radio waves from a few inches away. The

highly controversial device is being marketed as a way to access

secure areas, link to medical records, and serve as a payment

instrument when associated with a credit card or pre-paid account.

 

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ABOUT CASPIAN

 

CASPIAN (Consumers Against Supermarket Privacy Invasion and

Numbering) is a grass-roots consumer group fighting retail

surveillance schemes since 1999 and irresponsible RFID use since

2002. With thousands of members in all 50 U.S. states and over 30

countries worldwide, CASPIAN seeks to educate consumers about

marketing strategies that invade their privacy and encourage privacy-

conscious shopping habits across the retail spectrum.

 

==========================================

 

ABOUT THE BOOK

 

" Spychips " is the winner of the 2006 Lysander Spooner Award for

Advancing the Literature of Liberty and has received wide critical

acclaim. Authored by recent Harvard graduate Dr. Katherine Albrecht

and former bank examiner Liz McIntyre, the book is meticulously

researched. " Spychips " draws on patent documents, corporate source

materials, conference proceedings, and firsthand interviews to paint

a convincing -- and frightening -- picture of the threat posed by

RFID.

 

Despite its hundreds of footnotes and academic-level accuracy, the

book remains lively, readable, and hilarious, according to critics,

who have called it a " techno-thriller " and " a masterpiece of

technocriticism. "

 

" A chilling story about an emerging future in which spychips run

amok as Big Brother and Big Shopkeeper invade our privacy in

unprecedented ways. " " - Chicago Tribune

 

" Paints a 1984-ish picture of how corporations would like to use

RFID tags to keep tabs on you. " - The Associated Press

 

=========================================

 

FOR MORE INFORMATION OR TO ARRANGE AN INTERVIEW, PLEASE CONTACT:

 

Katherine Albrecht (kma[at]spychips.com) 877-287-5854 ext. 1 or Liz

McIntyre (liz[at]spychips.com) 877-287-5854 ext. 2

 

See http://www.spychips.com