Honig’s broker dealer Laidlaw target of FBI investigation

A bio-pharma company based in Massachusetts is the newest stock to be tied to a ring of small cap fraudsters lead by Barry Honig. Yesterday I reported Eloxx Pharmaceuticals ($ELOX) is being sued for fraud in relation to a securities transaction from 2017 that directly involves accused pump and dumpster Barry Honig and Philip Frost. I have now learned there is also a broker dealer that is under investigation by the government that helped team Honig sell shares of Eloxx to unsophisticated main street investors to create volume in the stock. According to multiple people who worked at the firm and public filings that broker is none other than Laidlaw & Co. At the time Laidlaw sold the first offering in Eloxx it was called Sevion Therapeutics.

Laidlaw is run by Matt Eitner and James (Jimmy) Ahern. The duo were subject to two investigative stories by this publication about there long-standing involvement in helping Barry Honig execute the dump portion of his scheme in multiple securities. Beginning in 2015 when Honig’s puppet CEO David Rector took over, Laidlaw pushed its staff to sell a $7 million private placement to its retail client base. Laidlaw is now being sued by a former long time client for up to $2 million for selling the client Eloxx and other stocks. The client is a retired doctor from New Jersey named Bruno Casatelli. According to a copy of the FINRA complaint, which is private because it’s in arbitration, also names Barry Honig as a nefarious insider working with Ladilaw’s Eitner and Ahern to benefit his investments over the firm retail clients. Stocks Casatelli names in the lawsuit as being sold with unsuitable recommendations and fraud are: Aethlon Medical, Inc., Actinium, Boston Therapeutics, 5G Investment, LLC., Alliqqua, Inc., Aspen Group, Inc., Brazahav Resources, Inc., Fusion Telecoms International, Inc., Protea Biosciences Group, Inc., Aeolus Pharmaceuticals, Inc., Biosig Technologies, Inc., Contravair Pharmaceuticals, Inc., Medovex Corp., Relmada Therapeuticals, Sevion Therapeutics, Spectrascience Inc, and Spherix Inc. Casatelli is being represented by Daxton White of The White Law Group out of South Florida.

Casatelli’s lawsuit list a litany of no-nos a FINRA registered broker dealer like Laidlaw knows it shouldn’t be doing but what now has the attention of the FBI and the DOJ in the Southern District of New York is the alleged conspiracy between Honig and Laidlaw executives to cheat their clients of out profits for the benefit of Honig and his other alleged bad actor small cap investors. According to a person with direct knowledge of the situation who was asked by the government to remain unnamed, at the beginning of this year the SDNY was calling in ex-Laidlaw staff to testify against the firm and were asked to wear a wire. I have previously reported there is an active FINRA enforcement investigation into Laidlaw but this is the first time I got notice the FBI in New York was recently involved.

Honig is currently battling a fraud suit led by the Securities and Exchange Commission but no criminal charges have been brought yet against the man who allegedly cheated main street investors out of millions for over a decade. The SEC amended complaint filed this month said Honig and his buddies, which include billionaire Philip Frost, Michael Brauser, John Stetson, and Marc Groussman, manipulated between 70 to 80 stocks over the course of their scheme. But only three companies are detailed in the regulators complaint. Recently, Frost’s OPKO Health made a SEC filing warning that while Philip Frost, the company head, has settled with the SEC without admitting guilt “other government agencies could still bring charges against Frost or his company”. Another agency likely means the DOJ. Which is why it would make sense for the DOJ to be building a strong case against Laidlaw’s Eitner and Ahern because if they get enough to charge them the Laidlaw duo would likely make very good cooperating witness against Honig.

Besides the client civil suits against Laidlaw, the firm nor its executives, have been charged by a government agency yet. Although they do have multiple FINRA fines imposed against the brokerage.

UPDATE 3.20.19 – Last night someone wrote into this publication saying they were a NBC journalist and were doing a story on me and stated they had proof I was accepting payment via venmo from people involved in the story. They used a nbcuni.com email address to post a comment demanding I answer that question here in the comments on this story. I have contacted NBC who had confirmed the name they used is not an NBC reporter, producer or even a name in their directory. The email was john.castletani@nbcuni.com.

This was a person pretending to be a fellow journalist trying to intimidate me.

I do not and never have taken donations from subjects of my stories. In fact in the last two stories I have reported this week I have received no donations although I need them. I was told by two former Laidlaw employees that Jimmy Ahern and Matt Eitner have hired a black ops public relations firm to try and retaliate against me for my reporting on their alleged fraud. Additionally there have been two attempts today to hack into my backend publishing platform. Luckily the software security for this news publication stopped it.

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Comments

  1. Hank Moody says:

    More than likely a scumbag audit firm doing their part as well. Consider the fines rec’d by the “big 4″….hundreds of millions. Call out the small accounting firms that allow this crap to happen. They don’t file without an opinion. Put some heat on the acct’g firm. Audit firms are pieces of shit. Richey May CPA in Denver will be the next one with their bullshit audits of mortgage companies….those audits aren’t reviewed by the PCAOB, so the dirt bags sell opinions before the audit is complete or thorough. The accountant CPA’s are the real shitbags….along with the filing lawyers of course.

  2. Carl Hostler says:

    Thank you Teri. Good work.

  3. Is blowhard Frank Earley at Mintz representing any of the defendant companies? If so, should SDNY pay Frank a visit and ask why he reps so many if these types of companies?

  4. What I still can’t believe is how stupid the Laidlaw brokers are, many of which are related to or childhood friends of Matt Eitner and Jim Ahern. Are you guys that dense about what is going on there? Are you just going to keep drinking the kool-aid that these two thieves keep feeding you? Maybe it’s time for you goombahs to start thinking for yourselves, if that’s at all possible because your firm is going down very soon like a deck of cards.

  5. I was a broker at Laidlaw prior to when Eitner and Ahern strongarmed their way in to assume control of the firm. I left over a year ago because I knew things had gotten sketchy, very sketchy. In the last number of months I have done a FINRA OTR, had an SEC inquiry, and just had a reach out by the DOJ, and also been contacted by one of the most notable Financial News Outlets in the world about all of the shenanigans there. Laidlaw is the worst firm on Wall Street, run by crooks. Investors and employees get out while you can.

    • The post from DB is another confirmation that Laidlaw is perhaps like a boiler room of yore. I thought that Wall Street was cleaned up. Maybe not yet.

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