Frost gang Report: Phillip Frost’s Legal Quagmire

Copyright 2020 by Lee Pederson1

Authored by: Lee Pederson

LeeMPete@aol.com
Date: January 18, 2020

Version 10.12

1
The author grants each user the right to view and read this Frost gang Report on the scribd website.
This Frost gang Report is otherwise protected by copyright law. To create, transfer, download or print any
copy of this Frost gang Report or portion thereof, the user must first negotiate and obtain a license by
contacting the author via email.
2
In the seven-plus years that I have been investigating, collecting, organizing, cataloguing and
synthesizing information about the Frost gang, I have used a variety of methods to organize and publish
my work. This Frost gang Report is somewhat arbitrarily labeled Version 10.1 to indicate that it is hardly
the first version, but that it is still a work-in-progress. This status as a work-in-progress will become
abundantly clear to anyone reading or using this Report. The present form is intended to be useful to
those who have been affected by the actions of the Frost gang, those who are dealing with the
consequences of those actions, and those who are interested in seeing changes in the environment
where the Frost gang and entities like them have operated for the last decade. Further, I note that
exposing the Frost gang is a collective and iterative process. Therefore, I am publishing this incomplete
and unpolished document in the belief that it will speed up the process of bringing justice to a number of
situations that have been created by the bad acts of Frost and his henchmen.

1
CONTENTS
SECTION I: Introduction to Phillip Frost and the Frost gang ……………..……...…… 4

SECTION II: Introduction to this Frost gang Report …………………………….…….. 7

SECTION III: Frost gang litigation, investigations and enforcement actions ………… 10
1- Dan Fisher litigation
2- Lee Pederson litigation
3- ​SEC v Honig
4- OPK
5- BioZone/COCP
6- PTE
7- RIOT
8- AWSM
9- Laidlaw & Company
10- LTS
11- TEVA
12- ELOX
13- Other companies named in investigations or litigation
14- Litigation to silence journalists and critics - 201x to
15- ​ Kesner v Barron’s, Alpert and Buhl
16- (Lack of ) Defamation suits against Lee Pederson
17- YesDTC
18- MBVX
19- DOJ criminal investigation
20- SEC OIG investigation
21- ​Pederson v Clayton
22. Possible new SEC charges
23. Pederson whistleblower complaint against Frost

SECTION IV: Frost gang people, companies, entities and methods ……… ……….... 18
1- Frost gang members and associates
A- Phillip Frost
B- Harvey Kesner
C- Barry Honig
D- Michael Brauser
E- John Stetson
F- John O’Rourke
G- Mark Groussman

2
 H- Steve Rubin
I- Jane Hsaio
(more)
2- Frost gang companies
A- BZNE/COCP
B- COOL/PTE
C- OPK
D- RDVT
E- LTS
F- MBVX
(more)
3- List of Frost gang investment and control entities
4- List of Frost gang attorneys and accountants.
5- List of Frost gang stock promoters
6- List of Frost gang transfer agents
7- List of Frost gang investment banks
8- List of Frost gang hedge funds

SECTION V: Frost gang market manipulation methods and enablers ……………….. 26

SECTION VI: Hypothesis that Frost illegally sold OPK and TEVA
short on the Tel Aviv Stock Exchange (TASE)................................................................ 28

SECTION VII: Further reading and links …………………………………………….. 31

SECTION VIII: Other Barry Honig fraud networks (separate from the Frost gang) … 32

SECTION IX: Other related networks …………………………………………...…… 32

SECTION X: Investigating the Frost gang …………………………………………… 32

SECTION XI: The Frost Gang’s “Short and Distort” narrative ……………………… 33

SECTION XII: The current regulatory and enforcement environment ………………. 33

Summary and Conclusion ……………………………………………………………... 34

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 SECTION I: Introduction to Phillip Frost and the Frost gang

Phillip Frost’s attorneys recently described Phillip Frost in the first paragraph of a recent
lawsuit where Frost is the plaintiff:3

In another lawsuit, where Frost is a defendant, the plaintiffs described him thusly:4

According to Frost’s current wikipedia page, Frost’s philanthropy includes:

“​On October 16, 2003, a $33 million gift to the School of Music was announced by the
University of Miami. In honor of their bequest, the largest ever given to a university-based music
school in the U.S. at the time, the School of Music was officially renamed the ​Phillip and Patricia

3
​Frost v LTS
4

https://www.blbglaw.com/cases/opko-health-inc/_res/id=Attachments/index=0/2019-05-03%20Dkt%2073
%20-%20Consolidated%20Complaint.pdf

4
Frost School of Music​. In 2003, the Art Museum at ​Florida International University​ was officially
renamed ​The Patricia & Phillip Frost Art Museum​. On March 26, 2011, it was announced that Frost
had donated $35 million towards the construction of the new ​Miami Science Museum​ building at
Bicentennial Park​ in ​Downtown Miami​, named the ​Phillip and Patricia Frost Museum of Science​. In
March 2015, he donated an additional $10 million to support the development of the science
museums' planetarium, the Frost Planetarium.
He serves on the board of regents of the ​Smithsonian Institution​, as a member of the board
of trustees of the ​University of Miami​, of the ​Scripps Research Institute​, the Miami Jewish Home for
the Aged, chairman of the board of ​Temple Emanu-El (Miami Beach, Florida)​, and the ​Mount Sinai
Medical Center​.”

My own experiences with Frost do not match these glowing descriptions. In fact, Frost’s
reputation was the key element in an elaborate deception against me and others that went on for
more than a year before I realized that Frost and his gang were lying to me. There are clearly
multiple sides to Phillip Frost. What you see is not always what you get.
The SEC also painted a different version of Frost’s personna when it announced
securities fraud charges against Frost and his gang:5

Billionaire Phillip Frost is the head of a white collar gang that specializes in market
manipulation and securities frauds, especially pump and dump (P&D) securities frauds. The
Frost gang (Phillip Frost, Barry Honig, Harvey Kesner, Michael Brauser, John Stetson, John
O’Rourke, Mark Groussman, Steve Rubin, Jane Hsaio, and many others) have committed frauds
at dozens of public companies. Frost is the richest. most famous, most powerful, and most
influential member in the Frost gang. Frost owns the IVAX building in Miami, which serves as
the headquarters for the Frost gang. The frauds of the Frost gang have resulted in a wide range
of civil litigation, federal investigations, federal enforcement actions, and media reports.
Frost’s net worth was estimated to be about $4.9 billion in 2018.6 His current net worth
is estimated to be about $1.7 billion.7 Along with his net worth, Phillip Frost’s perceived stature
has fallen considerably since the SEC filed securities fraud charges against him and publicly
labeled him as a “fraudster” on September 7, 2018.

5
​https://www.sec.gov/litigation/litreleases/2018/lr24262.htm
6
​https://en.wikipedia.org/w/index.php?title=Phillip_Frost&oldid=856780387
7
​https://en.wikipedia.org/wiki/Phillip_Frost

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 Dan Fisher filed the first litigation exposing the Frost gang in 2012. When I began
collaborating with Fisher in 2014, Dan’s words were prophetic. Dan said that it would take a
three-prong strategy to completely unmask Frost and his gang. Fisher’s two lawsuits against the
Frost gang marked the first prong of civil litigation, and were the initial driving force of the
entire strategy. The second prong was federal investigation and enforcement, and Dan and I
were the primary catalysts in the process that eventually led to the filing of​ SEC v Honig et al.​
The third prong was media coverage of the gang’s fraudulent activities. Such media coverage
was extremely hard to come by in the beginning, but that has started to change.
Frost and his henchmen built an organization that has been difficult to bring down. Their
primary bulwark has been Frost’s vast wealth and his reputation as a successful businessman and
philanthropist. For both Dan Fisher and myself, Frost’s reputation allowed Frost to deceive us
long past the point where we would ordinarily have known that we were being lied to. It simply
did not make any sense to either of us that someone in Frost’s position would be leading a
fraudulent and criminal organization. Other strong points of the Frost gang were: their ability to
co-opt individuals into their frauds with the promise of financial rewards,8 their strategy of
silencing critics and reporters with litigation and the threat of litigation, Frost’s ability to control
ownership and management of public companies, their network of puppet officers and directors
to install in Frost gang companies, Frost’s ability to financially bail out companies when frauds
began to unravel,9 and Frost’s ability to dictate publicity and press coverage.
Many layers of the Frost gang’s frauds have been peeled away over the last couple years,
and more layers are revealed almost every week by civil litigation, federal investigations and
enforcement, and media coverage. Frost still has the money and power to direct armies of
lawyers, though now he is sometimes forced to pay the lawyers himself rather than use the
corporate treasuries of companies he controls.10 Similarly, Frost is still able to manipulate the
media by paying public relations / crisis management “fixers” like Sard Verbinnen, though the
days of Frost getting free and favorable media coverage in publications like ​ Forbes​ are long
gone. It is only a matter of time before the collapse of the Frost gang is complete.
Frost has consented to judgment and paid a $5 million fine as a result of securities fraud
charges in ​SEC v Honig.​ 11 As Bill Alpert wrote in ​Barron’s,​ those charges by the SEC may be
only the tip of the iceberg.12 Frost and his gang have done many dirty deeds at dozens of public

8
For example, Brian Keller associated himself with the Frost gang in the BioZone P&D.
9
As examples, Frost bailed out IDI with $47 million to merge with Fluent, and Frost has kept COCP
solvent with a series of private placements.
10
On October 25, 2019, OPK filed a prospectus with the SEC. Page S-31 of that prospectus stated that,
“​Our primary and side A directors and officers’ liability insurance carrier has denied coverage
for the class action and derivative suits filed against us and our directors and officers concerning
the allegations in the Complaint.”
11

https://www.genengnews.com/news/opko-health-ceo-and-chairman-agree-to-pay-5-6m-to-settle-sec-stoc
k-allegations/​ (December 28, 2018 news story)
12
​https://www.barrons.com/articles/sec-charges-phillip-frost-1536608366​ (​Barron’s​ article)

6
companies, so there is a lot of ground to cover in this report. I write to offer my observations and
opinions to anyone who is interested in the fraudulent and illegal activities of Phillip Frost and
the Frost gang.

SECTION II: Introduction to this Frost gang Report

I first came into contact with Frost and his gang in about February of 2011 when I flew
from Minnesota to Miami for a week of business meetings at Frost’s IVAX building. I was
working as outside patent counsel to a company called BioZone. Over the ten years I had
worked with BioZone, BioZone had developed a proprietary drug delivery platform technology
capable of reformulating many existing drugs. BioZone needed capital to grow its R&D and
manufacturing capabilities, and the Frost gang falsely promised that capital to BioZone.
Unfortunately, those 2011 false promises just marked the beginning of seemingly limitless
excretion of lies and frauds by Phillip Frost and his henchmen. This report is heavily informed
and influenced by my own personal experiences with Phillip Frost and the Frost gang.
The information in this report has been collected from a variety of sources, and I want to
thank the contributors. First and foremost, I want to thank Teri Buhl. Teri’s reporting at
teribuhl.com has been instrumental in exposing key aspects of the Frost gang. She is a journalist
in the truest sense of the word. Next, I offer thanks to Bill Alpert at ​Barron’s​. Third, I offer
thanks to Chris Carey of sharesleuth.com. Many other business writers have also made valuable
contributions. This category includes Hindenburg Research (Nate Anderson), Research Noir,
Ozgur Ogut and others. Finally, I want to thank those who have reached out to me by phone,
email and direct messages. Your information and support has been invaluable.
Most of the details about the frauds and crimes of Phillip Frost and the Frost gang are still
hidden. Of course, Frost never intended this information to become public in the first place.
Now that details are starting to come into the open, there are legal implications and layers of
lawyers regarding almost every aspect of the Frost gang. Federal investigations are confidential
by nature. The Frost gang uses the assertions of attorney/client privilege to try to protect
information about their frauds and crimes from discovery. Writers and reporters have to be
cognizant of the potential for legal assaults by the Frost gang, since even baseless legal claims
exact a toll on their targets. Courts hearing Frost gang cases tend to seal information when a
party requests that the information be sealed. My own situation is complicated by duties to
former clients and the courts where my cases are being heard, as well as strategic considerations
in my game of chess against Phillip Frost. Therefore, there are many documents in existence that
are not available to publish in this report. I am even withholding some documents that I have
prepared because of strategic reasons. However, over time much more will be revealed.
The Frost gang’s frauds are typically highly complex and compartmentalized. The
various components of each fraud often appear innocuous when viewed in isolation. Since this

7
report deals mainly with cataloguing the components of numerous interconnected financial
frauds, I admit that the following pages are often pretty dry reading. However, the stories of the
individual frauds can be quite interesting. Most of the fraud stories involve strong personalities
playing around with technologies and money in the crazy world of biotech and high tech start up
companies. The members of the Frost gang are colorful characters and it can be entertaining to
see their diabolically greedy plans unfold, in somewhat the same way that the book “Helter
Skelter” is entertaining. This is definitely not about fun and games. People are hurt by the
frauds. The stories are about Frost and others doing bad things, with they belief that they will
never be held accountable for their actions. In any event, for those who are interested in
complete, coherent, and detailed descriptions of the Frost gang’s frauds, they will mostly have to
go to documents that are referenced herein, but not included in this report. In my view, the most
entertaining fraud stories are as follows:
1- BioZone pump and dump as described in the original complaint for ​SEC v Honig​ (BioZone is
“Company A”).
2- BioZone pump and dump as described in the amended complaint for ​Pederson v Frost I.
3- MabVax pump and dump as described in ​MabVax v Sichenzia​.
4- PolarityTE pump and dump as described in the PTE class action consolidated complaint.
5- Phillip Frost short seller hypothesis as described in Section III of this report.
6- YesDTC pump and dump as described in the Joseph Noel plea agreement.
7- The fraudulent takeover of BioZone as described in Dan Fisher’s second amended complaint
in ​Fisher v BioZone.
With that being said, I now turn to the more mundane task of explaining the nuts and
bolts of the Frost gang’s criminal organization.
This report contains several sections. Sections I and II are introductory to Phillip Frost,
the Frost gang, and this Frost gang Report.
Section III includes various categories of litigation, investigations, enforcement actions,
and suspicious activities involving Frost and/or the Frost gang. While Frost himself is not
directly implicated in all the activities described, the actions of Frost’s accomplices, agents, and
co-conspirators often shed light on Frost’s own motives and methods. In many of the categories,
Frost has clear responsibility, civil liability, and criminal culpability for the illegal actions
described.
Section IV provides lists of people, companies and entities involved in the Frost gang
network, including: (1) a list of Frost gang members and associates with descriptions of their
roles in the Frost gang, and (2) a list of companies associated with the Frost gang with
descriptions of illegal and/or suspicious Frost gang activities at those companies.
Section V includes a list of market manipulation techniques and enablers with
descriptions of how these were involved in Frost gang activities.
Section VI explains my hypothesis that Frost may have profited by illegally short-selling
companies he controlled.

8
 Section VII provides links for further information on Frost and his gang.
Section VIII provides information on fraud networks operated by gang member Barry
Honig, where the frauds were apparently separate from the interest and control of Phillip Frost.
Section IX provides information on other networks that have some degree of separation
from both Frost and Honig.
Section X provides information on the process of investigating and exposing the Frost
gang’s fraudulent and illegal activities.
Section XI describes the Frost gang’s efforts to deflect and discredit critics by alleging
that critics are involved in illegal short selling.
Section XII describes the current regulatory and enforcement environment that has
allowed the Frost gang to perpetrate their frauds and crimes for the last decade.

The complexity of the frauds and the numbers of individuals, companies and entities
presents a challenge in preparing this report. I have tried to strike a balance between
completeness and overdescribing details (even when a detail may be crucial in regards to a
particular fraud). Therefore, I have adopted a convention that is intended to help the reader put
the pieces together for themselves when connections are not explained. In the lists of
individuals, entities and companies, identifiers in the entry prefaced with a plus sign (+) are
linked in an unspecified manner to the name on the list. For example, Opko Health (OPK) is
listed at section IV.2.C. In the OPK entry “+Phillip Frost” is shown. This means that there is
one or more connections between OPK and Phillip Frost. The reader can search this document
to find other mentions of Frost to see how Frost fits into the OPK situation. The reader can also
google -OPK Phillip Frost- to search the internet for connections between OPK and Phillip Frost.
Frost and the members of the Frost gang engage in a wide range of business activities,
ranging from completely legitimate operations to criminal fraud. The mere mention of a person,
company or entity in this report does not by itself indicate that I believe or represent that the
person, company or entity has engaged in fraudulent or illegal activity, or that any particular
action or activity described is fraudulent or illegal. Though guilt by association can sometimes
be inferred by context, it is not a universal rule.
This Frost gang Report is not comprehensive, complete, up-to-date, or fully referenced.
It is meant to be updated over time. Further, this report contains opinions and speculations in
addition to publicly known facts and information. It is my hope that this report will be useful for
those who are interested in exploring and understanding the nature and scope of the illegal
activities of Phillip Frost and his gang.

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 SECTION III: Litigation, investigations and enforcement actions

1- Dan Fisher litigation

A- ​ Fisher v BioZone​ (N.D.Cal.)
i. Docket
https://www.courtlistener.com/docket/5943256/fisher-v-biozone-pharmaceuticals-inc/?filed_afte
r=&filed_before=&entry_gte=&entry_lte=&order_by=asc
ii. This case was filed on July 16, 2012 and involved the fraudulent takeover of BioZone
Laboratories, Inc. by the Frost. The case initially settled in September of 2013 with Fisher
receiving about $2 million. The case was reopened in December of 2016 after Teri Buhl
reported that the FBI was investigating the Frost gang,13 with the gang alleging that Fisher
breached the non-disparagement clause in the settlement agreement. The case settled again in
February of 2018 concurrently with the Garcia Properties litigation.
B- ​580 Garcia Properties LLC v BioZone​ (“Garcia Properties litigation”)

2- Lee Pederson litigation

A- ​Pederson v Frost I​ (pvf1)
i. Amended complaint (filed on February 14, 2018)
https://www.scribd.com/document/374185521/Pederson-v-Frost-amended-complaint-filed-Febru
ary-14-2018​ (pvf1 amended complaint)
ii. ​Pederson v Frost I (​ pvf1) is currently on appeal at the 8th Circuit Court of Appeals.
B- ​Pederson v Frost II (​ pvf2)
i. ​Pederson v Frost II​ (pvf2) has been stayed pending the appeal of pvf1.
ii. Complaint (filed on
https://www.courtlistener.com/recap/gov.uscourts.mnd.181288/gov.uscourts.mnd.181288.1.0.pdf
(pvf2 complaint)
C- These lawsuits will continue for some time, though the exact legal procedures are
unknown right now. Among the possible procedural options are trial in Minnesota Federal
District Court, appealing the issue of jurisdiction to the U.S. Supreme Court, and refiling pvf2 in
Florida Federal District Court.

3- ​SEC v Honig
SEC v Honig i​ s the first major enforcement action by the Feds against the Frost gang.
A- SEC press release and complaints
https://www.sec.gov/litigation/litreleases/2018/lr24262.htm​ (SEC press release, Sept 7, 2018)

13

https://www.teribuhl.com/2019/05/22/sec-admits-team-honig-is-under-the-criminal-investigation-i-warned-
about-in-2016/​ (May 22, 2019 Teri Buhl story)

10
https://www.sec.gov/litigation/complaints/2018/comp24262.pdf​ (original complaint, Sept 7,
2018)
https://www.sec.gov/litigation/complaints/2019/comp24431.pdf​ (amended complaint)
The SEC has alleged that the defendants (10 individuals and 10 entities) violated federal
securities laws by conducting pump and dump (P&D) securities frauds at three companies:
“Company A” (BioZone/BZNE), Company B” (MGTI), and “Company C” (MabVax/MBVX).
B- Status of defendants
The following defendants have reached complete settlements with the SEC in this case:
Frost/FGIT (Frost Gamma Investment Trust) paid about $5.4 million. OPK paid $100 thousand.
Alpha Capital Anstalt paid about $957 thousand. Mark Groussman/Melechdavid paid about
$1.38 million.
The following defendants have reached partial settlements with the SEC, with the amount
to be paid as yet undetermined: John Ford, Brian Keller, Elliot Maza, Barry Honig/GRQ
Consultants.
The following defendants are preparing for trial: Michael Brauser/Grander Holdings,
John Stetson/Stetson Capital Investments/HS Contrarian Investments, Robert Ladd, and John
O’Rourke/ATG Capital.
C- Documents of special interest from the ​SEC v Honig c​ ase file:
i- Subpoena to Ben Brauser naming 33 companies and about 63 individuals related to the Frost
gang:
https://www.scribd.com/document/438274110/Michael-Brauser-Family-SEC-Subpoena-9-30-19
ii- The SEC disclosed that they have collected over 4 million documents in the preparation of
their case.
https://www.scribd.com/document/432570438/SEC-Subpoena-List-in-Barry-Honig-Investigation
-10-28-19​ (SEC’s document list)
iii- The parties discussed the existence of a DOJ investigation during a May 15, 2019 hearing:
https://www.scribd.com/document/411279656/May-15-2019-SEC-v-Honig-Discovery-Hearing
iv- The SEC submitted a letter to the judge stating that the SEC is continuing to investigate the
Frost gang for conduct that post-dates the charges in ​SEC v Honig.14
v. I wrote an open letter (from Lee Pederson) to Judge Edgardo Ramos objecting to Phillip
Frost’s settlement agreement.
https://www.scribd.com/document/396558127/Open-Letter-to-Judge-Ramos-Re-Frost-SEC-Settl
ement
vi. December 17, 2019 Stipulation and Order showing that Frost, OPK and Steve Rubin are
providing docs to the SEC as third parties.
https://www.courtlistener.com/recap/gov.uscourts.nysd.500558/gov.uscourts.nysd.500558.204.0.
pdf

14
​https://www.courtlistener.com/docket/7822644/157/securities-and-exchange-commission-v-honig/
(August 8, 2019 letter from SEC attorney Nancy Brown to SDNY Judge Edgardo Ramos)

11
4- Opko Health (OPK)
A- ​Steinberg v Opko​ (FLSD 1:19-cv-20502-JEM​) ​This Opko class action lawsuit has
been consolidated from numerous initial complaints. Frost is named as a defendant.The
120-page consolidated class action complaint was filed May 3, 2019 and can be seen at:
http://securities.stanford.edu/filings-documents/1067/OHI200_02/201953_r01c_18CV23786.pdf
B- Plaintiff Connie Wendt has sued Frost for frauds at OPKO, RIOT, VBIV and PTE. I
have not been tracking this litigation. A January 4, 2019 Miami New Times article about
Wendt’s case can be seen at:
https://www.miaminewtimes.com/news/miami-billionaire-phillip-frost-sued-for-additonal-stock-
fraud-10971262
C- OPK investigations
OPK is under investigation by the DOJ for improper Medicare billing under the False
Claims Act.
https://hindenburgresearch.com/opko-health-if-these-sec-charges-were-surprising-then-you-have
nt-been-paying-attention/
D- See section V of this report for my hypothesis that Frost was illegally short-selling
OPK and TEVA on the TASE.

5- BioZone Pharmaceuticals (BZNE) / CoCrystal Pharma (COCP)

A- ​Pepe v CoCrystal​ (DNJ 2:18-cv-14091-KM-JBC). This CoCrystal class action
lawsuit has been consolidated from numerous initial complaints. Frost is named as a defendant.
The 68-page amended class action complaint was filed June 25, 2019 and can be seen at:
http://securities.stanford.edu/filings-documents/1067/CPI200_02/2019625_r01c_18CV14091.pd
f
B- ​Tutschek v. Schinazi et al​ (WDWA 2:2019cv01775) A 51-page complaint was filed
on Nov 1, 2019. Frost is named as a defendant.

6- Majesco (COOL) / PolarityTE (PTE)

A- class action lawsuit
In Re PolarityTE Inc. Securities Litigation​ (DUT 2:18-cv-00510-JNP-PMW) This PTE
class action lawsuit has been consolidated from numerous initial complaints. Frost is not named
as a defendant. The 80-page amended class action complaint was filed April 2, 2019 and can be
seen at:
http://securities.stanford.edu/filings-documents/1066/P00_01/201942_r01c_18CV00510.pdf
Though Frost was not named as a defendant in this lawsuit, Frost played a major role in
the COOL/PTE P&D securities fraud, as documented in a variety of public news stories. Chris
Carey (aka Sharesleuth) has reported that Frost sold $6 million of COOL/PTE stock in 2017:

12
http://sharesleuth.com/investigations/2018/07/cool-mara-riot-the-big-money-bitcoin-biotech-dais
y-chain
B- PTE has disclosed in its public SEC filings that the company has received multiple
subpoenas from the SEC.

7- Biotix / Venaxis / Riot Blockchain (RIOT)

A- RIOT has disclosed that the company has received a subpoena from the SEC.
B- class action: ​Takata v Riot Blockchain
https://www.teribuhl.com/2019/10/08/barry-honig-secret-profit-taking-of-short-selling-publicatio
n-thestreetsweeper-org-opk-mgti/​ (complaint)

8- Cool Holdings (AWSM)

AWSM has disclosed that the company has received a subpoena from the SEC.

9- Laidlaw & Co.

Teri Buhl has written a series of articles describing how the Frost gang uses broker/dealer
Laidlaw & Company to sell shares of Frost gang companies to retail investors. Buhl’s article of
March 19, 2019 reports that Laidlaw in under investigation by the FBI.
https://www.teribuhl.com/2018/09/12/laidlaw-execs-helped-barry-honig-execute-stock-manipula
tion-scheme/
http://www.teribuhl.com/2019/03/19/honigs-broker-dealer-laidlaw-target-of-fbi-investigation/
https://www.teribuhl.com/2019/08/02/laidlaw-assisted-barry-honig-in-secret-stock-sales-pre-pd-
of-u-s-gold-usau/

10- Ladenburg Thalmann Financial Services (LTS)

A- ​Frost v LTS
Phillip Frost resigned as chairmain of LTS shortly after ​SEC v Honig​ was filed in
September of 2018, and then sold most of his LTS holdings to LTS after Frost settled with the
SEC in early 2019. In November of 2019, LTS announced that it would be acquired by Advisor
Group.15 Frost sued LTS shortly thereafter (December 2019). Five other lawsuits have also been
filed against LTS.
It appears to me that Frost’s primary motive for filing ​Frost v LTS​ is to shield his past
frauds at LTS from discovery and liability. The complaint, which was filed on December 20,
2019, can be found by searching at the following link:
https://www2.miami-dadeclerk.com/ocs/Search.aspx
B- Frost alleges a possible FINRA investigation at LTS in ​Frost v LTS:​

15
https://www.streetinsider.com/Corporate+News/Advisor+Group+and+Ladenburg+Thalmann+%28LTS%
29+Announce+Merger+%28Earlier%29/16118119.html

13
 C- I have filed an SEC whistleblower complaint for suspected securities violations.

11- Teva Pharmaceutical Industries (TEVA)

A- See Section V of this report for my hypothesis that Frost illegally sold TEVA short
on the Tel Aviv Stock Exchange (TASE).
B- TEVA Pharmaceuticals settled with the US government for Foreign Corrupt Practices
Act (FCPA) violations that largely occurred when Frost was Chairman at TEVA. The DOJ press
release about the $519 million settlement can be seen at:
https://www.justice.gov/opa/pr/teva-pharmaceutical-industries-ltd-agrees-pay-more-283-million-
resolve-foreign-corrupt
More information about the settlement and other shady dealings at TEVA when Frost was
Chairman can be seen at:
https://www.fiercepharma.com/pharma/former-teva-execs-board-members-to-pay-50m-for-role-
2016-foreign-bribery-case
C- TEVA has also settled false Claims Act (FCA) claims for fraudulent Medicaid billing
that occurred while Frost was Chairman.

12- Eloxx Pharmaceuticals (ELOX)

Winfield v ELOX
https://www.teribuhl.com/2019/03/18/honig-eloxx-pharma-sued-for-stock-fraud-elox/

14
 Teri Buhl has written about this case, which was filed on March 14, 2019. Frost is not
named as a defendant, though Frost was and is involved in ELOX and related companies.

13- Other Frost gang companies named in investigations and/or showing signs of suspicious
behavior
A- SEC Subpoena to Ben Brauser from ​SEC v Honig​. The subpoena lists 33 companies
and about 63 individuals related to the Frost gang:
https://www.scribd.com/document/438274110/Michael-Brauser-Family-SEC-Subpoena-9-30-19
B- While this section III is mostly limited to formal investigations and litigation, the
Frost gang committed frauds at many other Frost gang companies. Other Frost gang companies
are listed in Section IV.2..

14- Frost gang lawsuits to silence journalists and critics

A- ​Hoing v Drose
In this case, Honig successfully sued Chris Drose (aka Bleecker Street Research) to
retract a June 20, 2016 negative story on Frost gang companies Chromadex and Pershing Gold.
+ CDXC, +PGLC. +Jonathon Lebed, +Frank Jaksh, +Frost, +John Ford, +David Blech,
+Margie Chassman. +Hugh Dunkerley, +Rob Fried.

B- ​Honig v Buhl I ​ and ​Honig v Buhl II

In these two cases, Honig unsuccessfully sued Teri Buhl to silence her reporting on
MGTI, which is “Company B” in ​SEC v Honig.​
+Charles Harder, +Robert Ladd
D- ​Vuzix v Richard Pearson​ (SDNY 1:19-cv-00689-NRB)
This case was dismissed for lack of jurisdiction.

15- ​Kesner v Barron’s, Bill Alpert and Teri Buhl

https://www.scribd.com/document/419796626/Kesner-v-Barron-s-Bill-Alpert-and-Teri-Buhl-FL
SD-2019​ (complaint)
This lawsuit against two journalists smacks of desperation by attorney Harvey Kesner
and the Frost gang. The articles that Kesner complains about are highly unfavorable to Frost,
Kesner, and the Frost gang, but they are well-researched, well-written and accurate.16 17 If there
is some strategic motive behind Kesner’s bogus and sure-to-fail legal action, I do not see it. My
commentary on this case can be seen at:
https://www.scribd.com/document/426383625/September-18-2019-Pederson-Letter-to-Feds-Re-
Harvey-Kesner

16
​https://www.barrons.com/articles/sec-charges-phillip-frost-1536608366
17
​https://www.barrons.com/articles/the-lawyer-at-the-center-of-sec-pump-and-dump-case-1538675403

15
16- (Lack of) Defamation lawsuits against Pederson
The remarkable thing about this category is that no Frost gang individual or entity has
sued me for defamation, even though I have been outspoken about the frauds and crimes of the
Frost gang.
A- Over eight months ago, PTE threatened to sue me for contacting PTE director
Minnie Baylor-Henry regarding the P&D securities fraud at COOL/PTE:
https://www.scribd.com/document/407800853/190426-Letter-From-PTE-s-Legal-Counsel-to-Le
e-Pederson
I responded to this threat by posting PTE’s cease-and-desist letter on Twitter and
continuing to provide information to Ms. Baylor-Henry. As a result, PTE has not sued me, and
the PTE Board of Directors subsequently removed Denver Lough from his position as CEO, and
then removed Lough from his position on the BOD.
B- After Harvey Kesner filed ​Kesner v Barron’s​, I invited Kesner to sue me:

Kesner has not sued me.

C- I have frequently called Phillip Frost a fraudster and criminal on Twitter and in other
contexts. I use the hashtags #PrisonTimeforWhiteCollarCrime and #BernieMadoffofBiotech to
refer to Frost. Frost has not sued me.

17- YesDTC litigation

Teri Buhl has reported extensively on this set of cases that clearly implicates Barry Honig
in an early P&D operation that resulted in criminal convictions and civil judgments. This case
does not involve Frost, so the documents from this case are listed in section V of this report.
However, the YesDTC situation is highly relevant to the Frost gang situation for two main
reasons. First, documents from the YesDTC civil and criminal cases directly implicate Barry
Honig in a P&D securities fraud.. Second, the DOJ investigation of YesDTC has dove-tailed
with the present DOJ Frost gang investigation.
+Gregg Jaclin, +Joseph Noel, +David Zazoff, +Barry Honig, +Imran Husein

16
18- MabVax
A- ​MabVax v Honig et al​ (Superior Court of California, San Diego County, Case No.
37-2019-00018398) This case was filed on April 8, 2019 and alleges claims for unlawful market
manipulation, fraud, etc.
B- ​Mabvax v Sichenzia​. The original 39-page complaint against Harvey Kesner and his
former law firm can be seen here.
https://www.scribd.com/document/392545187/Mabvax-v-Sichenzia
The docket can be seen here:
https://www.courtlistener.com/docket/8138204/mabvax-therapeutics-holdings-inc-v-sichenzia-ro
ss-ference-llp/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc
C- MabVax class action

19- DOJ criminal investigations

I know from personal experience, correspondence, and documentation that specific
agents (FBI and US Attorneys) in the Department of Justice have been investigating members of
the Frost gang since at least 2014.
Teri Buhl was the first to write about the DOJ investigation on November 8, 2016:
https://www.teribuhl.com/2017/02/09/california-doj-investigating-honig-and-the-frost-group-2/
Buhl reported on another aspect of the DOJ investigation on March 19, 2019.
http://www.teribuhl.com/2019/03/19/honigs-broker-dealer-laidlaw-target-of-fbi-investigation/
Buhl also reported that SEC attorney Nancy Brown publicly confirmed the existence of
the DOJ investigation during a May 15, 2019 hearing in the case of ​SEC v Honig.​
https://www.teribuhl.com/2019/05/22/sec-admits-team-honig-is-under-the-criminal-investigation
-i-warned-about-in-2016/

20- SEC OIG investigation

In December of 2013, I filed an SEC whistleblower complaint about the P&D securities
fraud at BioZone. I followed up by providing the office of the whistleblower with voluminous
information about the fraud. In about July of 2015, Whistleblower Chief Sean McKessy called
me personally to tell me that his office would not take any action in regards to my complaint.
The SEC later began a separate investigation of the Frost gang because of new contacts between
the agency, Dan Fisher and myself, and eventually ​SEC v Honig​ was filed on September 7, 2018.
I have asked that the SEC Office of the Inspector General to investigate the
circumstances, communications, and deliberations that resulted in the McKessy phone call to me.
I have subsequently expanded my request and by asking that the SEC OIG investigate other SEC
actions and inactions related to the Frost gang.

21- ​Pederson v Clayton

17
 There are many honest and hard-working employees within the SEC. However, I believe
that in some instances individuals within the SEC have acted corruptly regarding the lack of
enforcement actions against the Frost gang. In other instances, I believe that individuals within
the SEC have acted corruptly or arbitrarily and capriciously regarding matters involving the
Frost gang. I have written an open letter to SEC Chairman Jay Clayton expressing these
concerns. My letter to Clayton can be seen at:
https://www.scribd.com/document/433709218/191106-Open-Letter-to-Jay-Clayton
I expect that the SEC will not address my concerns in a meaningful way. Therefore, at an
appropriate time and after framing the issues with Freedom of Information Act (FOIA) requests,
I intend to bring a lawsuit against Chairman Clayton to discover what has been going on inside
the SEC with respect to Phillip Frost and his gang.

22- Possible new SEC charges

January 16, 2020 article by Teri Buhl
http://www.teribuhl.com/2020/01/16/more-charges-coming-for-barry-honig-pd-ring-defendants-
mgti/

23- Pederson whistleblower complaint against Frost.

A- Original complaint filed on …
B- Application for whistleblower award filed ...

SECTION IV: Frost gang people, companies, and entities

The lists in this section name a wide range of people, companies, and entities associated
with the Frost gang and/or Frost gang members. Some of the people, companies and entities
have clearly been involved in frauds and/or crimes. However, the mere mention of a person,
company, or entity herein does not intend to represent the author’s opinion or belief that the
person, company, or entity is implicated in any fraud and/or crime or is controlled by the Frost
gang. The mention of a person, company or entity as a “Frost gang associate” or“Frost gang
company” or “Frost gang entity” means only that the person,company, or entity is connected in
some way to the Frost gang, a Frost gang member, or the actions of the Frost gang.

1- Frost gang members and associates

A- Phillip Frost
Phillip Frost is the oldest, richest, and most influential member of the Frost gang. Frost
owns the IVAX building in Miami, which serves as headquarters for the Frost gang. Frost’s
reputation used to be one of the Frost gang’s key assets, until it became widely known that Frost
is a fraudster.

18
 Many, if not most, of Frost’s frauds have not been completely exposed yet.18

B- Harvey Kesner
Kesner has been the main attorney for many of the Frost gang’s P&D securities frauds,
including the three P&D frauds described in ​SEC v Honig​. Kesner has not yet been charged by
the SEC or DOJ. Kesner left the New York law firm where he represented the Frost gang in
many P&Ds. Kesner apparently now practices in Florida. Kesner recently published a blog at
the link below. It’s good for a laugh. After all, very few people know more about fraud than
Harvey Kesner.
http://www.bestfinance-blog.com/income-career/attorney-harvey-kesner-discusses-how-foreign-i
nvestors-can-avoid-being-victims-of-financial-fraud/​ (blog by Harvey Kesner)

C-. Barry Honig

In ​SEC v Honig,​ the SEC described Honig as the “primary strategist” of the Frost gang’s
P&D operations. In addition to doing stock frauds in association with Phillip Frost, Honig also
has associated with other groups involved in suspicious activities. One such group included
Joseph Noel, Imran Husain, Gregg Jaclin and David Zazoff.19 Another Honig group includes
Andy and Catherine Defrancesco, Michael Serruya and Brady Cobb.20 Yet another involves
investment banking and brokerage firm Laidlaw & Co.21

D- Michael Brauser
Brauser is a defendant in ​SEC v Honig.​ After the SEC charged Brauser in ​SEC v. Honig
he resigned as Executive Chairman of Red Violet (RDVT), but Brauser still apparently controls
RDVT in a consulting or advisory capacity.
https://michaelhbrauser.com/​ (Brauser’s website)

E- John Stetson

18
​https://www.scribd.com/document/429644254/191010-Frost-as-an-OPK-Short-Seller-Hypothesis
(Pederson letter about possible short-selling of OPK by Frost)
19

https://www.teribuhl.com/2016/05/26/microcap-attorney-jaclins-co-conspirator-turned-doj-witness-in-shell-
factory-scheme/​ (Teri Buhl article)

20

http://www.teribuhl.com/2019/09/04/andy-defrancesco-quits-sol-global-top-job-after-bad-press-weighs-on-
stock-price-sol-cn-solcf/​ (Teri Buhl article)
21

http://www.teribuhl.com/2019/09/25/barry-honig-secretly-funded-underwriting-in-his-laidlaw-co-deals-trpx/
(Teri Buhl article)

19
 Stetson is a defendant in ​SEC v Honig​. Stetson is the former CFO at COOL/PTE.
Stetson reportedly was a fraternity brother of PTE’s general counsel Cameron Hoyler and PTE’s
COO Ned Swanson at Penn.

F- John O’Rourke
O’Rourke is a defendant in ​SEC v Honig​. O’Rourke is the former CEO at Riot
Blockchain (RIOT).

G- Mark Groussman
Groussman was a defendant in ​SEC v Honig​ until he settled with the SEC.

H- Steve Rubin
Rubin is an officer at OPK, and a director at a number of Frost gang companies.

I- Jane Hsaio
Hsaio is an officer at OPK, and a director at a number of Frost gang companies.

J- Richard Pfenniger
Pfenniger is a director at OPK, TRXC and the Frost Museum of Science. Vector Group.

K- Richard Lampen
Lampen is the chairman at LTS. Vector Group.

L- James J.Martin
Martin is a Frost gang factotum. Martin’s biography says,”​Mr. Martin has extensive
public company experience as a CFO. From 2014 to 2016 Mr. Martin was the Chief Financial
Officer of VBI Vaccines, Inc. (formerly SciVac Therapeutics, Inc.), a dual listed Canadian TSX
and NASDAQ commercial vaccine company, where he navigated the company in the successful
completion of a merger in July 2015 and an acquisition in May 2016. Since 2010, Mr. Martin has
also served as the Chief Financial Officer of Non-Invasive Monitoring Systems, Inc., an OTC
listed non-invasive medical devices company. From 2014 to 2015, Mr. Martin served as Chief
Financial Officer of the NASDAQ listed Vapor Corp, Inc. after serving as Chief Financial
Officer of NYSE listed TransEnterix, Inc. from 2010 to 2013. Earlier in his career, Mr. Martin
held finance positions at Aero Pharmaceuticals, AAR Aircraft Services and Systems Products
International. Mr. Martin was also an Operations Specialist with the U.S. Navy from 1985 to

20
1990. Mr. Martin holds an undergraduate degree in business administration and an MBA from
Barry University in Miami and is a Certified Public Accountant.”22

M- Adam Logal
Logal is the CFO at OPK.
+XBIO (BOD)

N- Curtis Dale

O- Brian Keller

P- Elliot Maza

Q- Roger Kornberg
+CoCrystal, +COCP, +CDXC, +XBIO

R- Adrian James
+MSLP. +RIOT

2- Companies associated with the Frost gang and/or Frost gang members
A- BioZone (BZNE)/CoCrystal Pharma, Inc. (COCP)
Before BioZone came into contact with the Frost gang, BioZone had a $15 million
manufacturing business, over a hundred employees, a proprietary drug delivery technology
platform, a patent portfolio of over 100 applications and patents in over 80 countries, and a rich
pipeline of potential pharmaceutical, OTC and nutraceutical products. The Frost gang destroyed
BZNE’s business and R&D program in order to conduct their P&D securities fraud.
BZNE/COCP is the first Frost gang P&D described in ​SEC v Honig​. However, according
to my calculations (which I have shared with the Feds), the allegations in ​SEC v Honig​ account
for only a fraction of the illegal profits the Frost gang made from the BZNE/COCP P&D. Frost,
Rubin and Hsaio are still on the COCP BOD. COCP’s CFO, James Martin, has spent much of
his career at a succession of Frost gang companies.
The market cap of COCP is about $23 million, down from a peak of over a billion
dollars. The last few days have seen a huge spike in trading volume. On October 31, 2019,
COCP filed a prospectus to sell more stock.

B- PolarityTE (PTE)

22

https://www.cocrystalpharma.com/news/press-releases/detail/36/james-j-martin-appointed-as-chief-financ
ial-officer-of

21
 PTE "doctors" used SkinTE, a product with no proof of safety or efficacy, on badly
burned children as part of their stock promotion. The SkinTE treatments failed. Fortunately, the
children survived.
PTE has disclosed that it has received a subpoena from the SEC.
PTE used to be Majesco (COOL).
COOL/PTE founder Denver Lough has been removed as CEO by the BOD, and Lough
has resigned from the board. PTE has filed a registration statement that would allow Lough to
sell 7 million shares of his PTE stock.

C-​ Opko Health, Inc. (OPK)

Frost is the CEO, chairman, and largest shareholder at OPK. A glance at Opko’s recnt
public SEC filings reveals a company in crisis:
-- Negative operating capital.
-- Negative net asset value when excluding intangible assets.
-- Opk losing $50 million per quarter.
-- No real prospect of increasing revenues significantly.
-- Multiple lawsuits.
-- Denial of insurance coverage for class action and derivative suits.
-- False Claims Act (Medicare fraud) allegations by the SDNY.
-- Allegations of illegal physician subsidies by the SDNY.
OPK’s share price is down from over 18 bucks a share to about a buck-fifty. About $8
billion of market cap has disappeared. OPK has entered into an underwriting agreement to sell
more stock.
+XBIO, +Phillip Frost, +Adam Logal

D- Red Violet (RDVT)

RDVT is bucking the trend of Frost gang companies by maintaining its share price, even
though RDVT’s financial disclosures in its SEC filings would not seem to support the current
valuation. I wrote to the SEC and DOJ on October 11, 2019 with my observations and
speculations about RDVT. This October 11 letter is not public at the moment.

E- Ladenburg Thalmann (LTS)

Frost is the former chairman at LTS.

F- MabVax (MBVX)
MBVXis one of the companies described in ​SEC v Honig​ as the subject of a Frost gang
P&D. MBVX is in bankruptcy proceedings. MBVX is suing Kesner.

G- Towerstream (TWER)

22
 Frost was an investor with Honig in TWER. TWER has a current market cap of about
$79 thousand, down from a peak of about $10 million.23

H- Transenterix (TRXC)
TRXC, formerly SafeStitch Medical, has a current market cap of about $52 million, down
from over $1 billion. Jane Hsaio and Richard Pfenniger are directors. Frost was an investor in
Safestitch, and helped the company raise money in a merger..

I- Cool Holdings (AWSM)

AWSM has disclosed that it has received a subpoena from the SEC. AWSM shares are
trading for about 26 cents, down from over 10 dollars in September of 2018.

J- Therapix (TRPX)
http://www.teribuhl.com/2019/09/25/barry-honig-secretly-funded-underwriting-in-his-laidlaw-co
-deals-trpx/​ (September 25, 2019 article by Teri Buhl)

K- RIOT
+Adrian James

L- ATNM

M- ELOX

N- SPEX

O- RLMD

P- MSLP
+Adrian James

Q- FLNT

R- NIMU

S- NVCN

23

https://insiderfinancial.com/towerstream-corporation-nasdaqtwer-is-playing-out-exactly-how-honig-expect
ed/117783/

23
T- PHIO

U- Pershing Gold (PGLC)/US Gold (USAU)

+Chris Drose story

V- VBIV

W- Xenetic Biosciences (XBIO)

+Kornberg, Sichenzia, Logal (BOD),
+Sichenzia (reverse merger Feb 12, 2014)

Y- Chromadex (CDXC)
+Roger Kornberg (BOD), +Phillip Frost, +Chris Drose (litigation)

Z- DCAR

AA- VPCO/HCMC

BB- HCYT

CC- MARA

DD- MGTI
MGTI is “Company B” is ​SEC v Honig.

EE- DRNE

FF- Vector Group (VGR)

+Frost, Pfenniger, Lampen

GG- PGLC/USAS

HH- IDI
IDI was the subject of a short seller report by the “Pumpstopper” in July of 2015.24
IDI (Brauser) responded with a published interview the next day.25

24
​https://www.valuewalk.com/2018/09/idi-pump-stopper/
25
​https://www.valuewalk.com/2015/07/idi-ceo-responds-to-pump-stopper-short-thesis/

24
 IDI merged with private company Fluent to become Cogint (COGT), assisted by a $47
million investment (bailout) led by Frost.
COGT split into Fluent (FLNT)26 and Red Violet (RDVT).

II- Chanticleer (HOTR/BURG)

JJ- Immune Pharmaceuticals (IMNPQ)

+Elliot Maza, +David Blech, +Margie Chassman

3- List of Frost gang investment entities

A- Marlin Capital (Honig and Brauser)

B- Southern Biotech

4- List of attorneys and accountants

A- Paritz

B- Sichenzia
+XBIO, TRPX

C- Harvey Kesner
+TRPX

5- List of stock promoters

A- Drew Ciccarelli

B- David Zazoff (MDM)

C- TSX Ventures

D- RedChip Investor Relations (David Gentry - book)

E- Mission IR

F- Third Coast Media

26

https://www.globenewswire.com/news-release/2018/04/11/1468504/0/en/Cogint-Inc-Announces-Corporat
e-Name-Change-to-Fluent-Inc.html

25
G- SmallCap IR

H- Stockbeast.

I- IRTH
IRTH is mentioned in the ​Mabvax v Honig​ complaint.
+Robert Prag

6- List of transfer agents

A- Bonsal

B- Kesner

7. List of investment banks

A- LTS

B- Cannaccord Genuity

C- Jeffries

D- HC Wainwright

E- Cowan - PTE, David Seaburg

F- Cantor Fitzgerald

8. List of hedge funds

A- Pontifax (Tomer Kariv) - TRPX

B- Alpha Capital Anstalt (Lichtenstein, defendant in ​SEC v Honig​)

C- Oracle Partners (Larry Feinberg)

See the Biospace article referenced in section ____.

SECTION V Frost gang market manipulation methods

26
1- Illegal swap trades
Both the complaint and amended complaint in ​SEC v Honig​ describe in detail how the
Frost gang used illegal swap trades during the BZNE P&D securities fraud.

2- Undisclosed paid pumping

John Ford has consented to judgment in ​SEC v Honig​.
Chris Carey has written a long and detailed article describing a network of writers who
illegally promote Frost gang companies.27
The Frost gang appears to use paid pumpers on internet message boards.

3- Broker/dealer activities
Teri Buhl has written a series of articles describing how the Frost gang uses Laidlaw &
Company to sell shares of Frost gang companies to retail investors.
https://www.teribuhl.com/2018/09/12/laidlaw-execs-helped-barry-honig-execute-stock-manipula
tion-scheme/​ (Teri Buhl article)

4- Illegal short selling

Teri Buhl has reported on the association between Barry Honig and “The Streetsweeper,”
a publication that has published short seller reports on OPK and MGTI.
https://www.teribuhl.com/2019/10/08/barry-honig-secret-profit-taking-of-short-selling-publicatio
n-thestreetsweeper-org-opk-mgti/
The take-home lesson from this story is that the Frost gang makes money on the pump
and dump as the share price of a company goes up, and they make money on the short side as the
price goes down. This is a key element in my hypothesis that Frost has profited from shorting
OPK and TEVA on the TASE (section III of this report).

5- Insider buying

6- Press releases

7- Possible involvement of market makers

8- Use of investment banks

9- Possible use of hedge funds

27

http://sharesleuth.com/investigations/2018/03/pretenders-and-ghosts-stealth-promotion-network-exploits-f
inancial-sites-to-tout-stocks​ (Chris Carey article)

27
J. Use of market makers

SECTION VI: Hypothesis that Frost illegally sold OPK and TEVA
short on the Tel Aviv Stock Exchange (TASE)

Billionaire Phillip Frost was the chairman of the board at Teva Pharmaceutical Industries
(TEVA) from 2010 until late 2014. Frost resigned from the TEVA BOD in early 2015. TEVA
is the largest public company in Israel.28 TEVA’s revenues are more than four times as much as
the second-ranked Israeli company. TEVA’s market cap is the second most, even after an 85%
decline since 2015. Here is TEVA’s trading chart for the last 10 years:

Frost was on the BOD of Northrop Grumman (NOC) from 1996-2009. NOC is the fifth
largest defense contractor in the world.29 Frost has been the chairman and CEO of Opko Health
(OPK) since 2007. Frost was the chairman at LadenburgThalmann (LTS) until 2018. Frost’s
other business and philanthropic activities are well known.30

28
​https://en.wikipedia.org/wiki/List_of_largest_companies_in_Israel
29
​https://en.wikipedia.org/wiki/List_of_defense_contractors
30
​https://en.wikipedia.org/wiki/Phillip_Frost

28
 Barry Honig and Michael Brauser are notorious serial fraudsters. The have committed
securities frauds at numerous companies over the past decade. They have built a corrupt stock
manipulation network (SMN) of paid pumpers, inside traders, analysts, broker/dealers, attorneys,
accountants, corporate officers, corporate directors, transfer agents, and others.

Frost has participated in multiple securities frauds with Brauser and Honig.31 Their
BioZone (BZNE) P&D securities fraud began in early 2011 with the fraudulent takeover of
BioZone Laboratories. At the time, Frost was near the peak of his wealth and power. Why did
Frost want to get mixed up with Honig and Brauser? Why would Frost commit criminal acts to
make a few million dollars when he was already worth billions?

Here is OPK’s trading chart for the last 10 years:

It can be seen from the TEVA and OPK charts that both companies experienced market
share price declines of about 85% from their mid-2015 peaks until the present. With OPK, the
decline represents about $8 billion in lost market cap. With TEVA, the 85% decline represents
over $50 billion in lost market cap. Both OPK and TEVA are traded on the Tel Aviv Stock
Exchange (TASE) as well as on US exchanges. There was clearly an opportunity to profit from
short selling both OPK and TEVA from 2015 until the present in both the US and Israel..

31
​https://www.sec.gov/litigation/complaints/2019/comp24431.pdf

29
 In addition to the above, we also know:
1- Honig and Brauser built a corrupt stock manipulation network (SMN).
2- Frost used that stock manipulation network (SMN) to participate in securities
frauds at BZNE and other companies, including MabVax (MBVX) and PolarityTE (PTE).
3- The SMN was used to pump up OPK’s share price before its 2015 peak.32
4- The SMN has been used to push Frost gang company stock prices down to enable
illegal profits from short selling.33
5- On December 22, 2016, the DOJ announced that TEVA had agreed to pay $519
million to settle charges relating to alleged Foreign Corrupt Practices Act (FCRP) violations.34
These charges date from Frost’s time at TEVA.
6- TEVA has recently settled multiple Medicaid fraud charges.35 These charges date
from Frost’s time at TEVA.

Other factors may have been in play for Frost:

7- Frost may have felt immune from SEC enforcement because he had connections
within the SEC.
8- Frost may have felt immune from DOJ prosecution because of the DOJ’s lack of
criminal prosecutions after the mortgage bubble collapse.36
9- Frost could not have built his own special purpose SMN just for OPK and TEVA,
so he had to accept and participate in numerous smaller frauds with Honig and Brauser in order
to use their SMN for his own purposes.
10- Frost may have known of inside information at TEVA (e.g. FCPA investigation)
that would result in a decline of TEVA’s share price.
11- Frost knew of inside information on OPK, and could control the dissemination of
information that would result in the decline of OPK’s share price.
12- By short-selling on the TASE, Frost could hide his operation and his profits from
US regulators.

So which is more likely?

32
See ​SEC v Honig​ and
http://sharesleuth.com/investigations/2018/03/pretenders-and-ghosts-stealth-promotion-network-exploits-f
inancial-sites-to-tout-stocks
33
​https://www.scribd.com/document/429644254/191010-Frost-as-an-OPK-Short-Seller-Hypothesis
34

https://www.justice.gov/opa/pr/teva-pharmaceutical-industries-ltd-agrees-pay-more-283-million-resolve-for
eign-corrupt
35
E.g., see
https://news.bloomberglaw.com/health-law-and-business/teva-pays-135m-to-settle-illinois-medicaid-drug-
price-case​ and
https://www.prnewswire.com/news-releases/teva-pharmaceuticals-agrees-to-pay-54-million-to-settle-shep
herd-finkelman-miller--shah-llp-false-claims-act-qui-tam-case-300981936.html
36
​https://www.amazon.com/Chickenshit-Club-Department-Prosecute-Executives/dp/1501121367

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A- Phillip Frost associated himself with Barry Honig and Michael Brauser to make a few
million dollars at the risk of public humiliation and criminal penalties.
B- Phillip Frost associated himself with Barry Honig and Michael Brauser to use their SMN to
make hundreds of millions, or even billions, of dollars of hidden profits from short selling
companies where Frost had control and/or inside information.

Note: For a description on how I developed my hypothesis of Frost as a short seller of

OPK and TEVA, see “Frost as an OPK Short-Seller Hypothesis” from October 10, 2019:
https://www.scribd.com/document/429644254/191010-Frost-as-an-OPK-Short-Seller-Hypothesi
s

SECTION VII: Further reading and links

1- “Opko Health: The Placebo Effect” by Lakewood Capital Management, December 2013.
http://www.lakewoodlp.com/Opko_Health_The_Placebo_Effect.pdf
Seminal short seller report on OPK.
2- “PolarityTE: Will this Biotech be the next Amazon or Tesla?” by Jeff Dyer in Forbes,
August 8, 2017.
https://www.forbes.com/sites/innovatorsdna/2017/08/08/polarityte-will-this-biotech-be-the-next-
amazon-or-tesla/#ae5f40f363a5
Pump story by PTE insider.
3- “A Look into Billionaire Dr. Phillip Frost’s Risky Biotech Portfolio” by Mark Terry on
Biospace.com, January 4, 2017.
https://www.biospace.com/article/a-look-into-billionaire-b-dr-phillip-frost-s-b-risky-biotech-port
folio-/
4- “Meet Miami’s Renaissance Billionaire” by Matt Schifrin in Forbes, January 3, 2017.
https://www.forbes.com/sites/schifrin/2017/01/03/meet-miamis-renaissance-billionaire/#21beec3
7306b
“​it is precisely his meticulous attention to seemingly mundane details--like those many varieties
of palm trees--that underlies his uncanny ability to spot and capitalize on opportunities.”
5-

-- Publicity and news coverage regarding Frost gang civil litigation

-- High-profile corporate resignations after ​SEC v Honig ​was filed
-- Some coverage of the Frost gang by mainstream media37

37
​https://finance.yahoo.com/news/federal-criminal-probe-launched-connection-193529856.html​ (May 22,
2019 article by Jennifer Schlessinger of CNBC)

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 SECTION VIII: Barry Honig fraud networks (separate from the Frost gang)

1- Introduction
2- YesDTC
3- Laidlaw & Company
4- TRPX
5- Cannabis companies
A- AWSM
B- SOL
TEUM

SECTION IX: Other related networks

Richard Abbe, Bernstein , Iroquois, XSPA, Anonymous v Anonymous

SECTION X: Investigating the Frost gang

1- “Opko Health: The Placebo Effect” is the seminal piece of Frost gang investigative
reporting. This 46-page “short seller report” was published in December 2013 by Lakewood
capital management.
http://www.lakewoodlp.com/Opko_Health_The_Placebo_Effect.pdf

2- Journalists and business writers

3- Federal agents

4- The role of social media

A. Twitter has emerged as a space where information and opinions about the Frost gang is
shared by real people with real identities. The Twitter crowd includes journalists, business
writers, lawyers, investors and scientists. Information on Twitter includes links to new
investigative reports, court documents, SEC filings, commentaries and analyses. It also allows
for the sharing of information with visual impact. For example ...

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B. Even the message boards, once the secure domain of Frost gang pumpers, have changed
in tone. Here is a recent exemplary snip from the Yahoo message board for OPK:

iii. Kesner Honig youtube video

SECTION XI: The Frost gang’s “Short and Distort” narrative

1- PTE
2- Kesner v Barron’s
3- Joshua Mitts

SECTION XII: The current regulatory and enforcement environment

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 Summary and Conclusion

Very few of the lawsuits and investigations outlined in Section III above have been
resolved completely. In fact, we are still at a stage where new information is rapidly being
developed through several channels, including discovery in litigation, federal investigations,
media reports, and corporate SEC disclosures. The likely upshot is that there will be new and
continuing Frost gang litigation and enforcement actions for the foreseeable future. Since the
Frost gang companies were mostly designed as vehicles for P&D securities frauds and not
primarily to become profitable operating companies, the financial condition and share price of
the Frost gang companies is likely to generally decline. As time goes by, more truths behind the
frauds and crimes of Phillip Frost and the Frost gang will inevitably be revealed.

34