Biotech Billionaire Settles with SEC over Crypto P&D Scheme

Billionaire and notable healthcare investor Phillip Frost said last week he had reached a settlement agreement with the US Securities and Exchange Commission (SEC) to settle a civil complaint of stock fraud.

Frost, who is in his 80s, was one of 10 individuals and ten associated firms charged by the US regulatory agency in September with participating in blockchain-related pump-and-dump schemes.

Without admitting or denying the SEC’s allegations, and pending court approval, Frost agreed to pay a $5.5 million penalty and a partial ban on trading in penny stocks. Pharma group OPKO Health, where Frost acts as CEO and Chairman, will pay an additional $100,000 penalty.

“We have reached [an] agreement with the SEC 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 said in a statement.

The SEC’s case against the healthcare billionaire and his conspirators involves the biotech-turned-Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term company Riot Blockchain, which until October 2017 was a penny stock known as Bioptix. Following its rebranding, Riot’s stock surged more than 600 percent during that period, with the bulk of those gains coming after the company switched its focus to Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

Although its rebranding might seem like a minor thing, the change caused the company’s share price to jump from under $5 to near $50 in a matter of days. The company’s blockchain involvement has also drawn scrutiny from the Securities and Exchange Commission.

Bleak Business Highlights

Riot reported $2.8 million of revenue and a net loss of $24.4 million for the second quarter. In the January-March quarter, the former biotech company, which entered the cryptocurrency business in October 2017, brought in less than $1 million in revenue, according to its filing in May.

The company had $1.6 million in cash as of September 30, down from $1.7 million at the end of the second quarter, and from $41.7 million in December, according to the two most recent quarterly filings.

This is not the first time a blockchain-related company got in trouble due to a foray into the cryptocurrency-inspired technology.

Last year, the US securities watchdog also suspended another company tied distantly to the cryptocurrency industry after temporarily halting trading in shares of CIAO Group, citing concerns over the Nevada technology company’s planned initial coin offering (ICO).