On March 8, 2019, the Securities and Exchange Commission filed an amended complaint in an ongoing civil action in which the SEC alleges that numerous individuals and associated entities participated in microcap schemes that generated over $27 million from unlawful stock sales. The amended complaint includes additional allegations in support of its claims against thirteen of the original twenty defendants in a civil action.

Since the filing of the initial action last September, the SEC has obtained final consent judgments as to six defendants who allegedly had a role in the schemes. On January 10, 2019, the SEC obtained final judgments against Miami-based billionaire investor Phillip Frost; OPKO Health, Inc., a publicly traded company for which Frost serves as Board Chairman and Chief Executive Officer; and Frost Gamma Investments Trust, a trust controlled by Frost. On February 6, 2019, the SEC obtained final consent judgements as to Miami-based investor Mark Groussman; Melechdavid Inc., a company of which Groussman is President; and Alpha Capital Anstalt, a Lichtenstein-based hedge fund. The SEC dismissed its charges against Southern Biotech, Inc., a now-defunct entity.

According to the SEC's initial complaint, filed on September 7, 2018, the settling defendants failed to disclose that they were members of an investor group with respect to their investments in certain public companies, and in so doing, misled investors, and/or allegedly violated registration provisions of the federal securities in connection with their sales of securities in a penny stock issuer.

Without admitting or denying the SEC's allegations, the settling defendants consented to the entry of final judgments permanently enjoining them from future violations of various provisions of the federal securities laws, and cumulatively paid more than $7.8 million in disgorgement of ill-gotten gains together with prejudgment interest thereon and civil penalties. In addition, defendants Frost, Frost Gamma, Groussman and Melechdavid each consented to penny stock bars, and defendants OPKO and Alpha each consented to certain undertakings related to their respective investment policies and procedures.

For further information, see Litigation Release No. 24262, September 7, 2018.