Phillip Frost, a Miami-based biotechnology billionaire, and nine other people are facing U.S. Securities and Exchange Commission claims that they generated more than $27 million from unlawful stock sales in long-running pump-and-dump schemes that left investors with virtually worthless stock.
Barry Honig of Boca Raton, Florida led the group by buying large blocks of penny stocks at steep discounts from 2013 to 2018, according to the allegations in a lawsuit filed in federal court in Manhattan. The group would then promote the companies to drive up the prices, while secretly selling their shares.
The agency said the group manipulated the stocks of companies including Miami-based Opko Health Inc., which is led by Frost, 81. Shares of the health-care company fell as much as 28 percent before trading was halted.
“Honig and his associates engaged in brazen market manipulation that advanced their financial interests while fleecing innocent investors and undermining the integrity of our securities markets,” Sanjay Wadhwa, a senior associate director in the SEC’s enforcement division, said in a statement.
Honig owns as much as 10 percent of Riot Blockchain Inc, whose shares are currently down 20 percent in New York trading.
This article was provided by Bloomberg News.