The Securities and Exchange Commission is in settlement talks with “certain defendants” in its stock fraud lawsuit against billionaire Dr. Phillip Frost and Opko Health, plus other parties.
It’s not clear whether Frost, the CEO and chairman of company, or his Miami-based company (NASDAQ: OPK) were among the defendants in settlement discussions with the SEC. Opko and Frost declined comment, but they have denied the allegations.
The civil lawsuit was originally filed in September against Frost and nine other individuals, plus related companies. The SEC subsequently filed notice that it planned to issue an amended complaint by Jan. 4.
On Dec. 20, the SEC sent another memo to the court asking to delay the filing of its amended complaint to Feb. 8.
“Since that time [December 7], certain defendants have agreed to settlements in principal with the commission, and those settlements are pending commission review and approval,” the SEC stated in its memo to U.S. District Judge Edgardo Ramos in New York. “Certain other defendants have approached the staff to discuss possible settlement and to share their views about the allegations in the existing complaint. With those developments in mind, and to allow sufficient time for the settlement approval process and possible resolution with other defendants, the commission sought defendant’s agreement to extend the dates … by about a month.”
Only defendants Robert Ladd and Michael Brauser opposed the motion, according to the SEC. Officials from the SEC declined comment. Any settlement reached by the SEC must be approved by its five-member commission.
Judge Ramos approved the new Feb. 8 deadline for the SEC to file an amended complaint. The defendants will have until March 29 to file motions to dismiss.
The SEC complaint was filed against Frost, Opko, Barry C. Honig of Boca Raton, John Stetson of Fort Lauderdale, Brauser of Lighthouse Point, John R. O’Rourke III of Fort Lauderdale, Mark Groussman of Miami Beach, Ladd of Raleigh, North Carolina, Elliot Maza of New York, Brian Keller of California, John H. Ford of California, and various companies allegedly owned by these individuals.
On Sept. 21, Ford settled the case with the SEC without admitting or denying the allegation that he accepted secret payments from Honig to author materially misleading stock promotion articles on sites like Seeking Alpha. Honig, Frost and other co-defendants allegedly engaged in a “classic pump-and-dump scheme” with those companies, according to the SEC complaint.
The SEC complaint alleges the defendants participated in a stock fraud that generated over $27 million by manipulating the prices of three penny stock companies from 2013 into 2018. Frost allegedly participated in the scheme for two of those companies.
The SEC complaint said Honig would direct Frost, Stetson, Brauser, O’Rourke and Groussman when to buy, hold or sell stock in coordination with one another to manipulate stock value. The companies allegedly involved in the trading were BioZone Pharmaceuticals, MGT Capital Investments and MabVax Therapeutics Holdings.
The SEC is seeking civil penalties and the disgorgement of ill-gotten gains against the defendants. It will also seek an order preventing the defendants, including Frost, from participating in future penny-stock offerings.
The SEC wants a federal judge to bar Ladd, Maza and Keller from serving as officers or directors of public companies, but it did not request the same order for Frost.
It’s not clear whether Frost, the CEO and chairman of company, or his Miami-based company (NASDAQ: OPK) were among the defendants in settlement discussions with the SEC. Opko and Frost declined comment, but they have denied the allegations.
The civil lawsuit was originally filed in September against Frost and nine other individuals, plus related companies. The SEC subsequently filed notice that it planned to issue an amended complaint by Jan. 4.
On Dec. 20, the SEC sent another memo to the court asking to delay the filing of its amended complaint to Feb. 8.
“Since that time [December 7], certain defendants have agreed to settlements in principal with the commission, and those settlements are pending commission review and approval,” the SEC stated in its memo to U.S. District Judge Edgardo Ramos in New York. “Certain other defendants have approached the staff to discuss possible settlement and to share their views about the allegations in the existing complaint. With those developments in mind, and to allow sufficient time for the settlement approval process and possible resolution with other defendants, the commission sought defendant’s agreement to extend the dates … by about a month.”
Only defendants Robert Ladd and Michael Brauser opposed the motion, according to the SEC. Officials from the SEC declined comment. Any settlement reached by the SEC must be approved by its five-member commission.
Judge Ramos approved the new Feb. 8 deadline for the SEC to file an amended complaint. The defendants will have until March 29 to file motions to dismiss.
The SEC complaint was filed against Frost, Opko, Barry C. Honig of Boca Raton, John Stetson of Fort Lauderdale, Brauser of Lighthouse Point, John R. O’Rourke III of Fort Lauderdale, Mark Groussman of Miami Beach, Ladd of Raleigh, North Carolina, Elliot Maza of New York, Brian Keller of California, John H. Ford of California, and various companies allegedly owned by these individuals.
On Sept. 21, Ford settled the case with the SEC without admitting or denying the allegation that he accepted secret payments from Honig to author materially misleading stock promotion articles on sites like Seeking Alpha. Honig, Frost and other co-defendants allegedly engaged in a “classic pump-and-dump scheme” with those companies, according to the SEC complaint.
The SEC complaint alleges the defendants participated in a stock fraud that generated over $27 million by manipulating the prices of three penny stock companies from 2013 into 2018. Frost allegedly participated in the scheme for two of those companies.
The SEC complaint said Honig would direct Frost, Stetson, Brauser, O’Rourke and Groussman when to buy, hold or sell stock in coordination with one another to manipulate stock value. The companies allegedly involved in the trading were BioZone Pharmaceuticals, MGT Capital Investments and MabVax Therapeutics Holdings.
The SEC is seeking civil penalties and the disgorgement of ill-gotten gains against the defendants. It will also seek an order preventing the defendants, including Frost, from participating in future penny-stock offerings.
The SEC wants a federal judge to bar Ladd, Maza and Keller from serving as officers or directors of public companies, but it did not request the same order for Frost.