Phillip Frost wants you to think he’s a great dude. His name is everywhere in Miami. Most notably, he and his wife, Patricia, recently put up tons of cash to name the downtown science museum after themselves.
But this past September, the U.S. Securities and Exchange Commission accused Frost and a cadre of other investors of operating a massive “pump and dump” stock scheme, in which the healthcare billionaire and his conspirators promoted worthless stocks, convinced unwitting citizens to buy up the nonsense securities, and then sold their own shares for a handy profit. If true, the move was painfully scummy.
But yesterday Frost’s healthcare and pharmaceutical company, Opko, sent out a media release announcing the financier has paid a $100,000 fine to settle his SEC lawsuit without admitting guilt. “We have reached an agreement 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 announced.
Calling the charges potentially “expensive” and “contentious” is an understatement: The SEC alleged Frost knowingly swindled unsuspecting investors and basically laughed his way to the bank afterward. The SEC said the Florida investors, led by a man named Barry Honig, engaged in three different stock-fraud schemes that netted $27 million. The feds said Frost participated in two of the three schemes: The group would allegedly coordinate in advance and decide to buy up worthless stocks. They would then publicly advertise that “smart” investors and companies were buying up these allegedly “hot” securities. The SEC said Frost even sent out Opko press materials advertising the stock buys.
The government alleged these actions convinced regular people to buy the stocks. That raised the price, after which Frost and his compatriots sold their shares for a nice gain. Then, with Frost and the other big-money backers gone, the stock prices fell again, stranding the average folks.
Frost, who denied engaging in any schemes from the start, received the key to the City of Miami just before the SEC announced its case.
In October, Opko shareholders filed six different lawsuits against Frost and the company. They alleged Frost should have known about the SEC’s case before it was officially filed. On top of that, the suits claimed Frost was needlessly bilking money from the company by charging it rent to use a Midtown Miami building Frost himself owns. At least one of those suits in Miami federal court remains open, and court records show Frost was sued again in Miami federal court over the alleged stock scheme on December 17. That suit remains open as well, which means Frost still has some more “potentially expensive, contentious, and time-consuming litigation” to sort through.