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Opko Health and CEO Charged by SEC in Pump and Dump Scheme

NEW YORK (360Dx) – Opko Health and its Chairman and CEO Phillip Frost were among 20 defendants charged by the Securities and Exchange Commission on Friday with participating in market manipulation schemes that generated more than $27 million in unlawful stock sales.

According to this SEC's complaint, the group of defendants, which includes 10 individuals and 10 associated companies, manipulated the stocks of three companies from 2013 to 2018 through classic pump-and-dump schemes, in which stock prices were inflated through false or misleading information and then sold for a profit. Defendant Barry Honig was accused of orchestrating the market manipulations and Frost is accused of participating in two of the three schemes.

"As alleged, 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," said Sanjay Wadhwa, senior associate director in the SEC's Division of Enforcement, in a statement.

Frost faces five charges related to violating sections of the Securities Act and the Exchange Act and aiding and abetting violations of other codefendants. Opko faces one count of violating the Exchange Act and another count of violating the Exchange Act and the Securities Act by aiding and abetting codefendants. Frost Gamma Investments Trust, a company for which Frost is a trustee, faces four counts related to violating the Exchange Act and the Securities Act and aiding and abetting codefendants' violations.

In a statement, Opko accused the SEC lawsuit of containing inaccuracies that could have been corrected if the company had been notified of the commission's concerns prior to the filing of the lawsuit.

"The SEC failed to provide notice of its intent to sue prior to filing the complaint, which contains serious factual inaccuracies. Had the SEC followed its own standard procedures, Opko and Dr. Frost would gladly have provided information that would have answered a number of the SEC's apparent questions, and filing this lawsuit against them could have been avoided," the company statement said.

The commission is seeking to require defendants to pay back alleged ill-gotten gains with interest as well as pay civil monetary penalties. It also seeks to bar the defendants from participating in future penny stock offerings.

Trading of Opko's stock were suspended by the Nasdaq on Friday as a result of the investigation. At the time of the suspension, its shares were down about 18 percent at $4.58.