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Ladenburg Thalmann Financial Chairman Phillip Frost Charged with Fraud in Pump-and-Dump Penny Stock Scheme

The Securities and Exchange Commission alleged Ladenburgh Thalmann Financial Services chairman and largest shareholder Phillip Frost and a handful of co-defendants with perpetrating a series of fraudulent pump-and-dump schemes, allowing Frost and others to profit to the tune of several millions of dollars while leaving victimized investors holding virtually worthless shares of penny stocks, including penny stocks the SEC claims were unregistered securities.

Ladenburgh Thalmann Financial Services is a leading network of independent broker-dealers, some of which include Securities America, Triad Advisors, Investacorp, and Securities Service Network (SSN); Frost (CRD #3043962) has been associated with Ladenburgh Thalmann since 2005, with additional employment listed at Triad Advisors, Investacorp, Capitalink LC, and Teva Pharmaceutical Industries LTD.

Though a company spokesperson argued that the SEC's allegations are unrelated to Ladenburgh business activities, there remains concern that Frost, his co-defendants, or another person may have involved the firm in the furtherance of the purportedly fraudulent scheme, such as through client acquisition by using Ladenburgh Thalmann investor rosters, unsuitable recommendations, or illegal promotional activity.

According to the SEC's complaint against Frost, the defendants pushed three unnamed companies and penny stocks on investors, thereby artificially generating interest and inflating the microcap share prices (the pump). When the prices reached a certain apex, the group allegedly coordinated a massive sell-off, thus cashing out en masse for a profit while leaving retail investors holding virtually worthless stocks (the dump).

This alleged coordination led the SEC to additionally pursue allegations of aiding and abetting violations of the Securities Act and the Exchange Act.

In addition to Frost, the SEC complaint named as defendants individuals Barry Honig, John Stetson, Michael Bauser, John R. O'Rourke III, Mark Grousman, Robert Ladd, Elliot Maza, Brian Keller, and John H. Ford.

The SEC also included the following entities on the defendants list: Alpha Capital Anstalt, ATG Capital LLC, Frost Gamma Investments Trust, GRQ Consultants Inc., HS Contrarian Investments LLC, Grander Holdings Inc, Melechdavid Inc., OPKO Health Inc., Southern Biotech Inc., and Stetson Capital Investments Inc.

Frost serves as chairman of the board and CEO of defendant and multi-national biopharmaceutical diagnostics company OPKO Health Inc.

If you have invested with Ladenburgh Thalmann Financial Services' Phillip Frost or with any broker or financial adviser who has unsuitably recommended a penny stock that has later become worthless due to a pump-and-dump or similar fraud, or who has sold you unregistered securities that have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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The Law Offices of Jonathan W. Evans & Associates - California Securities Fraud Attorney
Located at 12711 Ventura Boulevard, Suite #440 Studio City, CA 91604. View Map
Phone: (800) 699-1881 | Local Phone: (818) 760-9880.
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