Phillip Frost |Securities and Exchange Commission|Litigation
Frost denies stock fraud charges in SEC suit
The Miami billionaire said he “will fight to clear my name” after the Securities and Exchange Commission filed a lawsuit charging him with stock fraud
Miami billionaire Phillip Frost, the largest shareholder of brokerage firm Douglas Elliman’s parent company, denied charges by the Securities and Exchange Commission that he committed securities fraud.
Frost, who owns 15.3 percent of publicly held Vector Group, faces charges of participation in a fraudulent scheme to manipulate stock prices. Vector, which owns most of Douglas Ellimam through a subsidiary, is based in an office building at 4400 Biscayne Boulevard in Miami. It also is the headquarters of Opko Health, which Frost runs as chairman and CEO.
“I was stunned by the SEC’s lawsuit and deny the allegations it contains against me,” Frost said Friday in a prepared statement. “It was particularly disturbing that the SEC departed from its own longstanding practice of providing advance notice and a meaningful opportunity to address their questions in advance of filing an action.”
The SEC filed a lawsuit Sept. 7 alleging that Frost participated in a scheme to inflate the prices of unidentified stocks and then sell them, generating $27 million of illegal stock sales and causing substantial harm to other investors.
The SEC charges in its lawsuit that Frost participated in stock fraud with Barry Honig, a Boca Raton businessman who allegedly orchestrated large purchases of stock issued by three small companies, then engaged in “illegal promotional activity and manipulative trading to artificially boost each issuer’s stock price.”
But in the statement he released Friday, Frost said he invested in two of the three unidentified companies “because I understood the entities presented promising medical developments and a real opportunity to deliver value for shareholders. I remain a significant long-term investor in both companies.”
Citing reports by other media outlets, the Miami Herald reported Friday that Cocrystal Pharma and MabVAx Therapuetics Holdings are the two of the three unidentified companies in the SEC lawsuit.
“The allegations against me are belied by common sense, my history of supporting promising scientific technology, and the facts,” Frost said in his statement. “Nothing is more important to me than my integrity … I intend to fight the charges that have been brought against me and will fight to clear my name.” – Mike Seemuth