The Securities and Exchange Commission announced on Friday charges against a group of 10 individuals and their associated entities for long-running fraudulent schemes that brought in over $27 million.
The SEC called those charged "microcap fraudsters" in a press release.
Two of those charged were John O'Rourke, CEO of Riot Blockchain, and Barry Honig, once Riot's largest shareholder. The charges are not related to Riot Blockchain, and it is not named or referenced in the complaint. Both O'Rourke and Honig are based in south Florida.
"Honig was the primary strategist, calling upon other Defendants to buy or sell stock, arrange for the issuance of shares, negotiate transactions, or engage in promotional activity," according to the SEC complaint. "In each scheme, Honig orchestrated his and his associates' acquisition of a large quantity of the issuer's stock at steep discounts, either by acquiring a shell and executing a reverse merger or by participating in financings on terms highly unfavorable to the company."
The SEC brought the action for "three highly profitable 'pump-and-dump' schemes perpetrated by Honig, [John] Stetson, [Michael] Brauser, [John] O'Rourke, [Mark] Groussman, and [Phillip] Frost, and their entities," the complaint alleged. Frost is a well-known biotech investor and founded Opko Health.
CNBC reached out to all those named in the complaint. Groussman said, "No comment." The other defendants were not immediately available.
The SEC also alleges the defendants arranged and paid for stock promotion.
"Honig then directed O'Rourke to write a promotional article, which O'Rourke published under the pseudonym 'Wall Street Advisors' on Seeking Alpha," the complaint said. "[O'Rourke] also knowingly and falsely claimed 'not receiving compensation'" for writing the article.
In another instance cited by the SEC, John Ford, also a defendant, allegedly failed to disclose in an article promoting a stock that he had been compensated by Honig for writing the article, with Honig selling him below-market shares.
Riot Blockchain is a cryptocurrency company whose stock price skyrocketed after it changed its name.
Riot's stock was down more than 24 percent on the news.