Florida billionaire Phillip Frost and his company, Miami-based Opko Health, have agreed to a $5.5 million settlement with the Securities and Exchange Commission to settle charges revolving around a pump-and-dump scheme, Opko announced Thursday.
In the settlement, which is subject to court approval, Frost agreed to pay the multimillion-dollar fine and will be prohibited from trading in penny stocks, with some exceptions, according to Opko. Opko agreed to a separate $100,000 penalty.
Ladenburg Thalmann is a major network in the independent broker-dealer universe. It owns Securities America, Triad Advisors and Investacorp and in addition to the Ladenburg firm.
"We have reached agreement with the SEC that will end a potentially expensive, contentious and time-consuming litigation and I am happy that we can focus on an exciting and productive 2019 for Opko Health,” Frost said in press release. The settlement was reached without Frost or Opko admitting or denying the charges.
Frost and nine other individuals, plus 10 companies, were charged in September with orchestrating a $27 million scheme to manipulate penny stock prices that left investors with worthless stock. Frost, who is the founder of Opko and is well known for his philanthropy and investing in leading-edge health products, will remain CEO of Opko.
He retired from his position as chairman of Ladenburg Thalmann after the charges were filed, and Ladenburg Thalmann bought back his shares of the firm earlier this week. Frost had been Ladenburg Thalmann’s largest shareholder. Frost has denied the SEC charges. Others involved in the case have until February 28 to file answers to the charges.