In re Opko Health, Inc. Securities Litigation

Court: United States District Court of the Southern District of Florida
Case Number: 1:18-cv-23786-JEM
Class Period: 09/26/2013 - 09/07/2018
Case Contacts: John Rizio-Hamilton, Jai K. Chandrasekhar, Adam Hollander, Brenna Nelinson, R. Ryan Dykhouse

Securities fraud class action filed on behalf of a class of investors who purchased or otherwise acquired Opko Health Inc. (“Opko”) common stock from September 26, 2013 to September 7, 2018, inclusive, and were damaged thereby (the "Class Period").

The Complaint alleges that Defendant Phillip Frost, CEO and Chairman of Defendant Opko, who enjoyed a reputation as a savvy investor in biotechnology companies and was sometimes referred to as the “Warren Buffet of biotech,” used Opko, a publicly traded company, as a vehicle for illicit investing activities. The action arises from alleged false statements and omissions by Frost and Opko concealing the involvement of Frost, Opko and other Defendants in multiple illicit “pump-and-dump” stock schemes. The Defendants allegedly used orchestrated trading and false promotional pieces to artificially “pump” up the share price of companies in which they had invested, and then “dumped” their shares by selling them to unsuspecting investors, leaving investors holding stock that was, in truth, virtually worthless.

In September 2018, after a significant investigation, the SEC charged Frost and Opko with numerous violations of the federal securities laws for this misconduct. When their deep involvement in these schemes was revealed, the price of Opko common stock collapsed by more than 30%, causing significant harm to Opko shareholders.

Background

In December 2013, investment company Lakewood Capital Management (“Lakewood”) published a detailed report titled, “Opko Health: The Placebo Effect” (the “Lakewood Report”), which connected Frost and Opko with two individuals named Barry Honig and Michael Brauser, among others, implicated in numerous suspect investments going back years. The Lakewood Report detailed examples of litigation against, and suspected fraud by, Honig and Brauser, and raised serious concern among Opko investors. In the days after Lakewood’s criticisms were aired, Opko’s stock declined significantly on elevated trading volume. Frost and Opko denied the allegations in the Lakewood Report.

Throughout the Class Period, Frost and Opko made a host of other public statements in SEC filings, investor conferences, and the media that were designed to reassure investors that their investment activities were legitimate, were based on the identification of valuable medical technology, and were made to benefit Opko and its shareholders.

Unfortunately for investors in Opko stock, as the Complaint alleges, these statements were materially false and misleading, and served to conceal a disturbing truth: unbeknownst to investors, Frost and Opko were indeed involved in multiple alleged illicit “pump-and-dump” schemes with Honig and Brauser. Investors in Opko stock did not learn the truth about this misconduct until September 7, 2018, when the SEC charged Frost, Opko, Honig, Brauser, and multiple additional entities controlled by Frost with a litany of violations of the federal securities laws for engaging in multiple “‘pump-and-dump’ schemes” leaving “retail investors holding virtually worthless shares.”

On February 4, 2019, the Court appointed The Amitim Funds as Lead Plaintiff, and BLB&G as Lead Counsel, for the Class, and on May 3, 2019, Lead Plaintiff filed the Complaint on behalf of a class of investors who purchased or otherwise acquired Opko common stock from September 26, 2013 to September 7, 2018. Lead Plaintiff brings this action to recover the Class’s damages caused by Frost and Opko’s false and misleading statements and omissions about their participation in the fraudulent pump-and-dump schemes.

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