Alleged Microcap Fraudsters Charged by SEC in Market Manipulation Schemes


From doing this, the underlying stock had the appearance of possessing an active trading volume, which made it more attractive to retail investors. Per the SEC’s complaint, Honig and his associates then dumped their shares into the inflated market, securing millions of dollars at the expense of unsuspecting investors.

Smoke and Mirrors

“As alleged, Honig and his associates engaged in brazen market manipulation that advanced their financial interests while fleecing innocent investors and undermining the integrity of our securities markets,” said Sanjay Wadhwa, senior associate director in the SEC’s Division of Enforcement. “They failed to appreciate, however, the SEC’s resolve to relentlessly pursue and punish participants in microcap fraud schemes.”

The SEC’s complaint, filed in federal district court in Manhattan, New York, charged Honig, John Stetson, Michael Brauser, John R. O’Rourke III, Mark Groussman, Frost, Elliot Maza, Robert Ladd, Brian Keller, John H. Ford, Alpha Capital Anstalt, ATG Capital LLC, GRQ Consultants Inc., HS Contrarian Investments LLC, Grander Holdings Inc., Melechdavid Inc., OPKO Health Inc., Frost Gamma Investments Trust, Southern Biotech Inc. and Stetson Capital Investments Inc. with violating antifraud, beneficial ownership disclosure and registration provisions of the federal securities laws.