SEC v. Barry C. Honig; John Stetson; Michael Brauser; John R. O'Rourke III; Mark Groussman; Phillip Frost, et al., No. LR-24262, Southern District of New York (Sept. 7, 2018) — Press Release
raw: Barry C. Honig, et al.
Barry C. Honig, et al., No. LR-24262 (S.D.N.Y. Sept. 7, 2018)
Barry C. Honig and nine others, including Miami biotech billionaire Phillip Frost, were charged by the SEC for participating in long-running microcap fraud schemes that generated over $27 million from unlawful stock sales.
The SEC charged ten individuals and ten entities for their roles in a years-long microcap fraud scheme that generated over $27 million through illegal pump-and-dump manipulations from 2013 to 2018. The alleged fraud involved manipulating the share price of three companies through classic pump-and-dump schemes, with Honig orchestrating the acquisition of large quantities of stock at steep discounts. The defendants are charged with violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws.
The Securities and Exchange Commission (SEC) charged ten individuals and ten entities, including Miami biotech billionaire Phillip Frost and ringleader Barry Honig, in a years-long microcap fraud scheme that generated over $27 million through illegal pump-and-dump manipulations from 2013 to 2018. Honig and his associates acquired large stakes in three companies at steep discounts, then artificially inflated stock prices via fraudulent promotions and wash trading to lure retail investors. Once prices surged, they dumped their shares, leaving investors with worthless stock. The alleged fraud involved manipulating the share price of three companies through classic pump-and-dump schemes, with Honig orchestrating the acquisition of large quantities of stock at steep discounts. The defendants are charged with violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws, and the SEC seeks monetary and equitable relief. The case, led by the SEC’s Retail Strategy and Microcap Fraud Task Forces, is ongoing with assistance from FINRA.
Exhibits & Attached Documents (1)
Extracted insights
- $27.00M $27 million $10M–$100M
- person retail investors
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- person virtually worthless stock
- SEC charged a group of ten individuals and ten associated entities
- a group of ten individuals and ten associated entities participation long-running fraudulent schemes
- long-running fraudulent schemes generated over $27 million from unlawful stock sales
- long-running fraudulent schemes caused significant harm to retail investors
- retail investors left holding virtually worthless stock
- 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
- Securities and Exchange Commission charged Barry C. Honig, et al.
- Barry C. Honig, et al. participated in fraudulent schemes
- fraudulent schemes generated $27 million
- SEC filed No. 18-civ-08175
- unlawful stock sales caused significant harm to retail investors
SEC Charges Microcap Fraudsters for Roles in Lucrative Market Manipulation Schemes Litigation Release No. 24262 / September 7, 2018 Securities and Exchange Commission v. Barry C. Honig, et al., No. 18-civ-08175 (S.D.N.Y., filed September 7, 2018) The Securities and Exchange Commission today 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. According to the SEC's complaint, from 2013 to 2018, a group of prolific South Florida-based microcap fraudsters led by Barry Honig manipulated the share price of the stock of three companies in classic pump-and-dump schemes. Miami biotech billionaire Phillip Frost allegedly participated in two of these three schemes. 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's complaint, Honig and his associates then dumped their shares into the inflated market, reaping millions of dollars at the expense of unsuspecting investors. The SEC's complaint, which was filed in federal district court in Manhattan, charges Honig, John Stetson, Michael Brauser, John R. O'Rourke III, Mark Groussman, Frost, Elliot Maza, Robert Ladd, Brian Keller, John H. Ford, Alpha Capital Anstalt, ATG Capital LLC, GRQ Consultants, Inc., HS Contrarian Investments, LLC, Grander Holdings, Inc., Melechdavid, Inc., OPKO Health, Inc., Frost Gamma Investments Trust, Southern Biotech, Inc., and Stetson Capital Investments Inc. with violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws and seeks monetary and equitable relief. The SEC's continuing investigation is being conducted out of its New York Regional Office by Katherine Bromberg and Charu Chandrasekhar of the Enforcement Division's Retail Strategy Task Force, Tim Nealon, Ricky Tong, Joseph Darragh, and Michael Paley of the Enforcement Division's Microcap Fraud Task Force, and Jon Daniels of the Enforcement Division's Cyber Unit , with the assistance of Edward Janowsky and Steven Vitulano of the New York Regional Office Broker Dealer and Exchange Examination Program. The litigation will be led by Nancy Brown, Ms. Bromberg, and Mr. Daniels, and the case is being supervised by Mr. Wadhwa. The SEC appreciates the assistance of the Financial Industry Regulatory Authority. SEC Complaint
SEC Charges Microcap Fraudsters for Roles in Lucrative Market Manipulation Schemes Litigation Release No. 24262 / September 7, 2018 Securities and Exchange Commission v. Barry C. Honig, et al., No. 18-civ-08175 (S.D.N.Y., filed September 7, 2018) The Securities and Exchange Commission today 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. According to the SEC's complaint, from 2013 to 2018, a group of prolific South Florida-based microcap fraudsters led by Barry Honig manipulated the share price of the stock of three companies in classic pump-and-dump schemes. Miami biotech billionaire Phillip Frost allegedly participated in two of these three schemes. 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's complaint, Honig and his associates then dumped their shares into the inflated market, reaping millions of dollars at the expense of unsuspecting investors. The SEC's complaint, which was filed in federal district court in Manhattan, charges Honig, John Stetson, Michael Brauser, John R. O'Rourke III, Mark Groussman, Frost, Elliot Maza, Robert Ladd, Brian Keller, John H. Ford, Alpha Capital Anstalt, ATG Capital LLC, GRQ Consultants, Inc., HS Contrarian Investments, LLC, Grander Holdings, Inc., Melechdavid, Inc., OPKO Health, Inc., Frost Gamma Investments Trust, Southern Biotech, Inc., and Stetson Capital Investments Inc. with violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws and seeks monetary and equitable relief. The SEC's continuing investigation is being conducted out of its New York Regional Office by Katherine Bromberg and Charu Chandrasekhar of the Enforcement Division's Retail Strategy Task Force, Tim Nealon, Ricky Tong, Joseph Darragh, and Michael Paley of the Enforcement Division's Microcap Fraud Task Force, and Jon Daniels of the Enforcement Division's Cyber Unit , with the assistance of Edward Janowsky and Steven Vitulano of the New York Regional Office Broker Dealer and Exchange Examination Program. The litigation will be led by Nancy Brown, Ms. Bromberg, and Mr. Daniels, and the case is being supervised by Mr. Wadhwa. The SEC appreciates the assistance of the Financial Industry Regulatory Authority. SEC Complaint