Open Letter from Lee Pederson re: MabVax Litigation

May 12, 2020

DOJ and SEC agents (bcc)

SEC OIG
Phillip Frost (c/o attorney Joe Dixon)
Brian.Lee@bakerbotts.com
Dan Fisher (c/o attorney Vytas Rimas)
Journalists and business writers (bcc)
Other interested persons
Posted online at scribd.com

All,

1. Billionaire fraudster Phillip Frost is the leader of a white-collar gang that

specializes in market manipulation and securities frauds, especially pump and
dump (P&D) securities frauds. The Frost gang has directed securities frauds at
numerous public companies.

2. Frost gang frauds have resulted in tangles of investigations and litigation at

many public companies. Such actions include DOJ investigations, SEC
investigations, SEC enforcement actions (SEC v Honig), at least one FDA
investigation (PTE), securities fraud class action lawsuits, shareholders derivative
lawsuits, and a variety of other civil litigation.

3. Frost gang companies currently involved in tangled litigation include

BZNE/COCP, OPK, LTS, COOL/PTE, MGTI, RIOT and MBVX.

4. Other Frost gang-related legal proceedings include a FINRA arbitration

involving Laidlaw & Company, securities fraud class action lawsuits at Aphria and
Pariteum that describe the involvement of Frost gang member Barry Honig, and
the Kesner v Barron's lawsuit, in which Frost gang attorney Harvey Kesner alleges
that journalists Teri Buhl and Bill Alpert defamed him.

5. I have provided my perspective on Kesner v Barron's in an earlier open letter

dated September 18, 2019. That letter can be seen at:
https://www.scribd.com/document/426383625/September-18-2019-Pederson-
Letter-to-Feds-Re-Harvey-Kesner
1
6. This present letter focuses on various litigation related to MabVax (MBVX).

7. The MBVX situation is especially interesting for a number of reasons:

A -- The pump and dump fraud at MBVX began in 2016, placing the relevant
events well within the statute of limitations for criminal securities fraud charges.
B -- The SEC chronicled the MBVX P&D in SEC v Honig.
C -- Billionaire fraudster Phillip Frost is clearly implicated in the MBVX frauds.
D -- SEC v Honig has caused the individuals involved at MBVX to scurry around
in an effort to minimize damage to themselves. This has involved the individuals
suing each other. It may also involve various individuals attempting to strike deals
with the SEC and DOJ at the expense of other individuals.
E -- Many of the details of the frauds at MBVX have not yet been publicly
disclosed. However, the various MBVX-related lawsuits offer a fascinating
glimpse into the world of the Frost gang. Of course, since many of these details
may be incriminating, Frost gang members and associates are attempting to hide
the facts as best as they can.
F -- It seems highly likely that the SEC and/or DOJ will bring additional charges
against Frost gang members and associates, including possible criminal charges for
events related to MBVX.

8. The MBVX litigation began on June 4, 2018 with the filing of a class action
lawsuit for securities fraud.
http://securities.stanford.edu/filings-case.html?id=106618

9. SEC v Honig was filed on September 7, 2018. Phillip Frost and nine other
individuals were named as defendants in SEC v Honig, which described P&D
securities frauds at BZNE/COCP, MGTI and MBVX. Defendant John Ford
consented to judgment concurrently with the filing of the complaint.

10. MBVX shareholder derivation actions soon followed SEC v Honig.1

11. A consolidated complaint in the MBVX class action was filed on October 10,
2018.

12. MabVax v Sichenzia was filed in California state court and then removed to
federal court on October 30, 2018. This case describes the role of Harvey Kesner
in the MabVax P&D.

1
See the MBVX 10-Q for Q118 for details.
2
https://www.courtlistener.com/docket/8138204/mabvax-therapeutics-holdings-inc-
v-sichenzia-ross-ference-
llp/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc

13. The MBVX class action was voluntarily dismissed on December 6, 2018. The
unusual circumstances surrounding the dismissal are described in my earlier open
letter to the SEC and DOJ dated January 20, 2020.
https://www.scribd.com/document/443606513/RE-John-Lemak-and-the-Frost-
Gang

14. The MBVX shareholder derivative cases were also dismissed.

https://www.courtlistener.com/docket/8033904/liesman-v-
hansen/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc

15. Phillip Frost consented to judgment in SEC v Honig in January of 2019.

16. Additional defendants in SEC v Honig have continued to settle their cases with
the SEC. All MBVX-related defendants have now consented to judgments.

17. MBVX filed for bankruptcy on or about March 21, 2019.

https://www.wsj.com/articles/mabvax-therapeutics-blames-bankruptcy-on-alleged-
pump-and-dump-scheme-11553201597

18. Mabvax v Honig was filed on April 8, 2019. This case names Frost and
numerous other Frost gang members and entities as defendants.
https://www.scribd.com/document/443441429/Mabvax-Therapeutics-Holdings-vs-
honig

19. Baker Botts represents MBVX in MabVax v Honig.

20. The two MBVX lawsuits against Frost gang members Frost, Kesner, Honig
and others have been steadily progressing past the motions phase and towards the
discovery phase.

21. Harvey Kesner filed Kesner v Baker Botts on or about January 21, 2020.
https://images.law.com/contrib/content/uploads/documents/405/52587/Kesner-v-
BB.pdf

22. I have described the circumstances around Kesner v Baker Botts in another
open letter dated January 30, 2020.
3
https://www.scribd.com/document/444968454/200130-Open-Letter-From-Lee-
Pederson-Re-Kesner-v-Baker-Botts-Lawsuit

23. MabVax v Sichenzia was stayed on February 7, 2020 by agreement of the

parties.

24. A new case called Honig v Hanson was filed on April 7, 2020 in Florida state
court and removed to federal court on May 7, 2020.
https://www.scribd.com/document/461060354/200511-Honig-v-Hanson-
Complaint

25. The trio of cases of Kesner v Barron's (paragraphs 4 and 5 of this letter),
Kesner v Baker Botts (paragraphs 21 and 22 of this letter), and Honig v Hanson
(paragraph 24 of this letter) are remarkable in displaying the obvious desperation
of the Frost gang. Along with denials, procedural delays and obfuscation, their
defense now involves wild and false accusations against others, including me.

26. Though this letter focuses on MBVX, similar soap operas are playing out at
other Frost gang companies. PTE features the usual cast of bad actors from the
Frost gang, plus another set of colorful characters. The dark comedy of litigation at
BZNE/COCP has been playing almost continuously since 2012. OPK includes the
main plot line, with billionaire fraudster Frost desperately clinging to his self-
delusion of power and control. Greed and securities fraud are the common themes
at all the Frost gang companies and in all the Frost gang performances. MBVX is
just one example of the truth finally catching up with Phillip Frost, Barry Honig,
Harvey Kesner, and the rest of the Frost gang.

Signed,

/Lee Pederson/