Barry Honig settles Securities Fraud lawsuit with Eloxx Pharmaceutics investor: $ELOX

Barry Honig has agreed to settle the Eloxx securities fraud suit and drop his counterclaim against a fellow high net worth investor John Winfield. This signals Honig or the company agreed to pay up on the stock he allegedly help cheat Winfield out of. Winfield was asking for as much as $2 million for his losses, which he says are a direct result of Honig’s alleged dirty dealing. During discovery secret emails were found that detailed the conspiracy between Honig and Eloxx executives James Schmidt and David Rector. Delaware district judge Richard Andrews approved the dismissal with prejudice on April 20, 2021.

Honig’s legal defense in the case had been he didn’t have any control over the executives running the company. But according to an email leaked to this reporter Honig’s controlling roll started early on when he got his buddies at Laidlaw & Company to put their main street retail investors in the predecessor of Eloxx which was called Sevion Therapeutics.

Barry C. Honig on a pharma lab tour

According to the email, on April 23 2015, we see Honig yelling at Laidlaw head of capital markets, Jimmy Ahern, because a dealer agreement isn’t signed and turned in a week after Ahern told Honig they had raised $5 million for the company. Honig admits he is getting paid as a consultant for the company, which means he is not just a passive investor in the stock. John Stetson was also included in the email chain as it appears they are working as a group. It’s unclear if Laidlaw clients who invested in Sevion knew Honig was working as a consult to the company.

Ahearn Head of Capital Markets at Laidlaw & Co

According to two former Laidlaw brokers who sold this deal Jimmy Ahern had a habit of over promising the amount his team could raise. In this case it looks like the Laidlaw brokers needed more time to collect on verbal commitments to clients. Normally we would see the CEO of the company communicating with the broker dealer who is raising money for their company but not here.

Matt Eitner, the president of Laidlaw, would not respond to questions about who was really in charge of on this deal. Laidlaw was the sole bookrunner for Sevion and says over few years they raised $7 million for the company.

Sevion ($SVON) became Eloxx Pharmaceuticals at the end of 2017 and currently trades under $ELOX.

Honig and Stetson have settled with the SEC after they were charged with running a long time pump and dump scheme and agreed to penny stock bans. Stetson now runs a South Florida pizza joint called Stoner’s Pizza.

Stetson the Pizza guy

Broker Check records show Matt Eitner and Jimmy Ahern are still under FINRA investigation for their role in overseeing a securities fraud.

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