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SEC charges Ladenberg Chair Phillip Frost and others with Fraud

Phillip Frost

10 Charged in $27 Million Pump and Dump Schemes

According to a press announcement on Friday, the Securities and Exchange Commission charged a group of ten individuals and ten associated entities for their participation in long-running fraudulent schemes that “generated over $27 million from unlawful stock sales and caused significant harm to retail investors who were left holding virtually worthless stock.”

One of the ten individuals was Dr. Phillip Frost, the non-executive chairman and largest shareholder of Ladenburg Thalmann Financial Services Inc.

Frost has reportedly served as chairman of the board and CEO of OPKO Health, Inc., a multi-national biopharmaceutical and diagnostics company, according to Investment News.

The SEC alleges from 2013 to 2018, Barry Honig led a group of South Florida-based microcap fraudsters to manipulate the share price of the stock of three companies in classic pump-and-dump schemes.

According to reports, Miami biotech billionaire Phillip Frost allegedly participated in two of these three schemes. The SEC did not identify the companies.

Honig allegedly orchestrated the acquisition of large quantities of the issuer’s stock at steep discounts, and after securing a substantial ownership interest in the companies, Honig and his associates engaged in illegal promotional activity and manipulative trading to artificially boost each issuer’s stock price and to give the stock the appearance of active trading volume, according to the SEC.

Honig and his associates allegedly scored millions of dollars at the expense of investors, dumping shares into an inflated market, according to the SEC.

Frost and Honing and eight other investors and related entities were charged with violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws. The SEC is seeking monetary and equitable relief.

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The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.

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