181030 - My Battle Against a Billionaire - Litigation Update - October 30, 2018

Billionaire Phillip Frost is the head of a white-collar gang that specializes in market
manipulation and securities fraud. Pederson v Frost et al relates to a pump and dump securities
fraud at BioZone Pharmaceuticals, Inc., and other frauds by the Frost gang at BioZone.

The lawsuit known as Lee Michael Pederson vs. Phillip Frost, Opko Health, Inc., Brian
Keller and CoCrystal Pharmaceuticals, Inc. began in the Minnesota State court system in late
2017. The Defendants then removed the case to Minnesota Federal District Court. I filed an
amended complain on February 14, 2018. My complaint can be seen here:
https://www.scribd.com/document/374185521/Pederson-v-Frost-amended-complaint-filed-
February-14-2018

The Defendants filed motions to dismiss my complaint. A main part of their strategy was
to try and convince the court that my allegations were implausible and not to be believed. After
all, I'm just a peon in Minnesota making accusations against a billionaire Florida philanthropist.
Who would you expect the court to believe?
https://www.law.com/almID/4f997802160ba02b7d0000ef/

Briefings on the Defendants' Motion to Dismiss were completed, and oral arguments
were held before Magistrate Judge Becky Thorson on May 29. On July 11, Judge Thorson's
R&R (report and recommendation) recommended that my complaint be dismissed for lack of
jurisdiction. I filed a written objection and the Defendants responded on July 30. On September
27, almost two month later, District Court Judge Wilhelmina Wright ordered that my case be
dismissed.

After the arguments in District Court, but before Judge Wright issued her ruling, on
September 7 the SEC brought charges against Frost, Opko and Keller for fraud at
BioZone/CoCrystal. TheSEC's allegations of the BioZone pump and dump almost exactly
matched the allegation in my complaint. The SEC's case against Frost made the national news.
https://www.nbcnews.com/news/us-news/florida-billionaire-phillip-frost-charged-sec-27-
million-fraud-plot-n907751

I filed a notice of appeal on October 11. Then the 8th Circuit Court of Appeals issued a
briefing schedule. My initial brief is due on December 4. The Defendants then get 30 days to
file their brief. Then I get 14 days to file a reply. The 8th Circuit panel may or may not hold
oral arguments.

The SEC's allegations regarding the pump and dump securities fraud at BioZone are
nearly identical to mine, but the District Court was never aware of the SEC's lawsuit and the
SEC lawsuit is not in the record of Pederson v Frost. The 8th Circuit panel of three judges will
review my appeal based solely on the record. Therefore, I have filed a motion with the 8th
Circuit to place the SEC's lawsuit against Frost into the record. The Defendants have opposed
my motion. I just filed my reply brief earlier today. I expect that there will be a decision on my
motion (regarding putting the SEC case documents into the record of my case) in advance of the
deadline to file my brief (regarding the appeal of my case).
 Separately, the SEC litigation is now proceeding against Frost and others. There are 20
defendants in the SEC case. The case is called SEC v Honig et al. The court filings in that case
can be seen at:
https://www.courtlistener.com/docket/7822644/securities-and-exchange-commission-v-
honig/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc

My Battle Against a Billionaire continues.

Lee Pederson
Minneapolis, MN

+++

The SEC's complaint can be seen here.

https://www.sec.gov/litigation/complaints/2018/comp24262.pdf

The SEC's press release regarding the SEC complaint against the Frost gang is entitled,
"SEC Charges Microcap Fraudsters for Roles in Lucrative Market Manipulation Schemes." The
press release can be seen here.
https://www.sec.gov/litigation/litreleases/2018/lr24262.htm

My motion, the Defendants' opposition, and my reply can be seen at these links:
Plaintiff's Motion to Supplement the Record by Judicial Notice. October 24, 2018.
https://www.scribd.com/document/392065088/181024-Motion-to-Supplement-Record-Court-
Stamp
Defendants' Opposition to Plaintiff's Motion. October 25,
2018.https://www.scribd.com/document/392065159/181025-Ds-Opposition-to-Motion-to-
Supplement-the-Record
Plaintiff's Reply to defendants' Opposition. October 31,
2018.https://www.scribd.com/document/392064979/181031-Reply-to-Response-Court-Stamp
The ScribD version of this litigation update can be seen here.

Note: This litigation update was originally emailed to various journalists, federal agents (FBI,
SEC, US Attorneys) and others on October 31, 2018. A link to this ScribD page was posted on
Twitter the same day.