Opko Health, CEO Named in Pump-and-Dump Stock Fraud Scheme
Case: The U.S. Securities Exchange Commission charged billionaire drug entrepreneur Phillip Frost and his company, Opko Health, for participating in a market manipulation scheme allegedly organized by investor Donald Honig. According to the SEC complaint, Honig and his associates planted puff pieces about three companies they controlled and then dumped their shares leaving investors who ponied up $27 million to purchase them with grossly overvalued stock. Opko denies the charges and plans to fight it out in court. Significance: As surely as day follows night, SEC stock fraud charges lead to private shareholder litigation. Accordingly, as many as 10 law firms are lining up to file class action lawsuits against Opko for failing to disclose the firm and Frost’s role in the scheme. The market reaction to the SEC announcement forced Nasdaq to suspend trading in Opko stock for a week.
Case: The U.S. Securities Exchange Commission charged billionaire drug entrepreneur Phillip Frost and his company, Opko Health, for participating in a market manipulation scheme allegedly organized by investor Donald Honig. According to the SEC complaint, Honig and his associates planted puff pieces about three companies they controlled and then dumped their shares leaving investors who ponied up $27 million to purchase them with grossly overvalued stock. Opko denies the charges and plans to fight it out in court.
Significance: As surely as day follows night, SEC stock fraud charges lead to private shareholder litigation. Accordingly, as many as 10 law firms are lining up to file class action lawsuits against Opko for failing to disclose the firm and Frost’s role in the scheme. The market reaction to the SEC announcement forced Nasdaq to suspend trading in Opko stock for a week.
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