Philip Frost, a longtime biotech billionaire, was accused Friday of taking part in a pump-and-dump stock scheme that bilked investors out of $27 million.
The Securities and Exchange Commission charged Frost and nine others in connection with what it described as a scheme to buy up shares in penny-stock biotechs, illegally promote the companies online, and then sell their shares before the bottom fell out.
Frost, who spent five years as the chairman of generics giant Teva Pharmaceutical and is now in his 80s, allegedly reaped $1.1 million by illegally selling shares of BioZone Pharmaceuticals and aided in a scheme to puff up the share price of a company called MabVax Therapeutics. Frost’s reputation as a biotech billionaire was key to the scam, according to the SEC, as each promotional online post highlighted his involvement in a given company in an effort to drive up stock prices.
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Dr. Frost was 1 of 20 and he was involved in only one of the companies. The shares he sold were for $1,000,000 all the 4 others were for $26,000,000. This is more of the SEC needing a name to go after.