The Securities and Exchange Commission filed a letter Tuesday morning saying that it had reached agreements to settle with three defendants in what the agency called "lucrative market manipulation." The SEC announced the charges in September 2018.
Among those to settle are John O'Rourke, former CEO of Riot Blockchain, a cryptocurrency company that was the subject of a CNBC investigation. The case is unrelated to Riot.
"The staff has reached agreements in principle to settle this action with Defendants Michael Brauser, John O'Rourke, and John Stetson, and their affiliated entities," the SEC letter said.
In September 2018, the SEC said it charged a group of 10 individuals and 10 associated entities. The SEC has reached agreements now with all defendants except one, according to court filings. Among those who already settled are Miami biotech billionaire Phillip Frost and Florida businessman Barry Honig, who was once the largest investor in Riot.
According to the SEC's press release announcing the case, Honig and his associates, based in South Florida, manipulated the stock of three microcap companies in "pump-and-dump" schemes, where they allegedly acquired shares at a discount and artificially boosted prices before selling. Riot Blockchain was not one of the companies.
An attorney for O'Rourke, Gregory Morvillo said in a phone call that his client had "no comment."
George S. Canellos, attorney for John Stetson, when reached by phone, said, "We have reached an agreement in principle to settle with the SEC."
An attorney for Brauser did not immediately respond to CNBC's request for comment.
The SEC declined to comment.
The settlements need to be reviewed and approved by the full commission, according to the SEC's letter. The agency expects to submit final judgments within six to eight weeks.
A CNBC investigation in February 2018 found a number of red flags at Riot Blockchain, the cryptocurrency company whose stock skyrocketed after it changed its name from Bioptix, including annual meetings that were postponed at the last minute, sales of stock by company insiders soon after the company's name change, dilutive share issuance on favorable terms to large investors, confusing SEC filings and evidence that a major shareholder was selling shares while everyone else was buying. The SEC case is unrelated to Riot.
O'Rourke accused CNBC of publishing "a negative one-sided piece."
"We have made significant inroads in building a diversified portfolio of investments and to begin securing digital assets," O'Rourke said in a letter to shareholders the day the CNBC investigation aired.
As bitcoin's price hit record highs in late December 2017, Riot was making news on a daily basis. The company's stock shot from $8 a share to more than $40 as investors chased the craze of all things crypto.
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