xG says it has long suspected that potential short sellers were 'intentionally libelling the company by spreading false rumours about the company, its directors and officers for some time'.

Richard Mooers, chairman and CEO, said, 'xG has already experienced individuals trying to hurt the company to serve their own financial interests, and they are being pursued in separate legal matters. It is now under investigation whether these additional attacks are indeed linked to those legal cases.'

xG says that since it announced a capital raise of $6.6m on December 24, at the same time as the company was proving up its innovations in the mobile VoIP over unlicensed spectrum, the share price has been driven down dramatically.

'The decline in stock at a time of important technical milestones and a strengthened balance sheet just did not compute,' said Mooers.

It claims the parties suspected of potential market manipulation and short selling operate in Europe.

'The Financial Services Authority has now been notified that these parties claim to have manipulated xG stock which is according to information obtained by the company.

'Short selling without following proper legal procedures and spreading false or misleading information about a company to drive down its stock are both offences in the UK and the US.'

Story provided by Business Financial Newswire