Riot Blockchain, Inc. changed its CEO in September after the SEC charged him in reference to a fraudulent $27 million pump and dump scheme. Now one other particular person concerned in that case, biotech billionaire Phillip Frost, has agreed to pay $5.5 million to settle the fees.
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$5.5 Million Settlement
The Securities and Trade Fee (SEC) charged a bunch of 10 people and 10 related entities back in September for fraudulent schemes that generated over $27 million from illegal inventory gross sales and “precipitated important hurt to retail traders who had been left holding nearly nugatory inventory.”
In response to the SEC’s criticism, the group of “microcap fraudsters” was led by Barry Honig who was as soon as the most important shareholder in Riot Blockchain, Inc. (NASDAQ:RIOT) and included John O’Rourke, its former CEO. From 2013 to 2018, the South Florida-based group manipulated the share worth of the inventory of three firms in pump-and-dump schemes, and Miami billionaire Phillip Frost allegedly participated in two of those.
On Thursday, Frost and his firm OPKO Well being, Inc. (NASDAQ: OPK) introduced they’ve agreed to a settlement with the SEC to resolve the motion introduced in opposition to them, topic to court docket approval. With out admitting or denying the SEC’s allegations, OPKO agreed to a $100,000 penalty. Frost agreed, additionally with out admitting or denying the SEC’s allegations, to roughly $5.5 million in penalties, disgorgement, and prejudgment curiosity. He additionally agreed to a prohibition from buying and selling in penny shares, with sure exceptions. Frost will proceed to function OPKO’s CEO and Chairman.
“We’ve got reached settlement with the SEC that may finish a doubtlessly costly, contentious and time-consuming litigation and I’m completely satisfied that we will deal with an thrilling and productive 2019 for OPKO Well being,” mentioned Frost.
Earlier than October 2017, Riot was a biotechnology firm referred to as Bioptix, Inc. that specialised within the improvement of veterinary diagnostic instruments. On October 4, 2017 Bioptix introduced it was altering its identify to Riot Blockchain and shifting its enterprise focus to investing in blockchain applied sciences.
In February 2018 Riot was hit with a class action lawsuit within the Southern District of Florida. The criticism alleged that the corporate did not disclose that it had modified its identify to Riot Blockchain so as to generate investor enthusiasm and tie the corporate to the then current rise within the worth of cryptocurrencies. This was achieved regardless of Riot’s lack of a big blockchain enterprise so as to additional an insider scheme that might enable controlling shareholder Barry Honig and his associates to promote their Riot securities at artificially inflated costs.
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Photographs courtesy of Shutterstock.
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