Billionaire Florida biotech investor Phillip Frost has confirmed an announcement that he will pay $5.52 million in order to settle civil charges from the United States Securities and Exchanges Commission (SEC) over his alleged role in fraudulent moves that cheated investors through what became, essentially, worthless stock shares.
This settlement will require that the chairman and chief executive of the Miami-based Opko Health Inc pays a fine of $5 million as well as $523,000 in damages, representative of what has been alleged to be the ill-gotten gains and interest from the worthless stocks he sold in his schemes to investors. Also, the settlement orders that Frost will accept restrictions on trading any penny stocks. Finally, Opko Health Inc also agreed to pay a $100,000 fine in a separate, but related settlement.
Of course, any agreement to pay a settlement means that nobody has to admit fault or wrongdoing, which is certainly true of this case. As a matter of fact, neither of the defendants (Frost nor Opko) admit to these charges. But the settlements will certainly end “potentially expensive, contentious, and time-consuming litigation” Frost did admit, via statement from Opko.
Now, Frost is only one of 10 people and 10 other associated entities being charged by the SEC for their involvement in manipulating share prices for three companies between 2013 and 2018. Accordingly, the SEC accused several defendants of buying large groups of penny stocks at extremely discounted prices and then falsely promoting the shares to artificially inflate their share prices. This would unethically convince innocent investors that the market was aflurry for these stocks. And then Frost and his compatriots would sell off these shares, which generated in excess of $27 million of, albeit improper, gains.
It has been alleged that Frost was involved in at least two of these schemes.
This case is important because Frost, now 82, is worth nearly $2 billion, according to Forbes magazine. More importantly, perhaps, he was the chairman and the chief executive of the drug company Ivax Corporation before he sold it to Israe-based Teva Pharmaceutical Industries, Ltd in 2006, for $7.4 billion. He later served as chairman for Teva.