Attorney Harvey Kesner and his former law firm Sichenzia Ross Ference LLP have agreed to payoff MabVax Therapeutics for Kesner’s alleged role in committing malpractice tied to a securities fraud pump and dump scheme led by his client Barry C. Honig. MabVax’s bankruptcy judge approved the settlement on September 15 because it was an amount that benefited Mabvax debtors, according to court filings. As part of the lawsuit settlement the amount of the payout to MabVax is sealed and it’s unclear how much attorney Kesner had to pay out of pocket or how much was paid by the law firm’s malpractice insurance. Kesner fought the case in Southern California District Court for more than a year but after mediation this summer his old firm appears to have finally folded. Since the case didn’t go to trial no one admitted guilt.
So far Kesner has retained his law license in New York regardless of his role representing the Honig cartel who have mainly settled securities fraud charges with the SEC. While Kesner’s name often appears in SEC subpoenas the SEC has not charged him in the Honig case although an ongoing criminal investigation is continuing led by the Northern California DOJ.
MabVax is a victim company in the Securities and Exchange Commission ongoing enforcement case against Honig and a group of men who helped execute pump and dump schemes and traded as a group of undisclosed affiliates to control the price of stocks for over a decade. Ten days after Kesner singed his malpractice settlement with MabVax the company filed an amended complaint against Honig and others who worked with him, in California State court, with even more details of how attorney Kesner allegedly assisted in Honig’s scheme.
Mabvax lawyers at Baker Botts wrote, “Defendants (Team Honig), Sichenzia, and Kesner, actively concealed their group status from MabVax.” And in a motion to dismiss hearing for Honig this summer Mabvax attorney Tania Rice, of Baker Botts, told the court Harvey Kesner in his role as attorney was “part of the fraudulent scheme”. Baker Botts has also stated in legal documents that they found through an internal investigation that in 2016 that Kesner advised MabVax to give misleading information to a regulator who came questioning about trades and investments in MabVax. Additionally, Kesner had stock in MabVax via his obscure private llcs Paradox Capital and Darwin, unbeknownst to MabVax. MabVax has accused Kesner of using those llcs to trade as an undisclosed affiliate with Honig. The group allegedly secretly owned a total of 53.95% of Mabvax by 2018.
To retaliate against MabVax for testifying for the SEC and the DOJ, Honig has personally sued the MabVax executives, David Hansen and Greg Hanson, in July in the Southern District of New York with a claim that he was falsely induced to invest. Honig says he wouldn’t have continued to invest in MabVax in 2018 if Hanson and Hansen had told Honig the SEC was investigated him. The problem is Honig leaves out of his lawsuit a fact pattern that could show it would be near impossible for him not to know what the SEC was focusing on in their investigation because his own attorney, Harvey Kesner, was the same person who was initially working for MabVax to answer the SEC investigative questions. The assumption could be of course Kesner told Honig what the SEC was asking MabVax about his investments which would be a conflict of interest for Kesner to disclose. Additionally, according to two people involved in the SEC case who worked directly with Honig, he would often accuses people of wearing a wire when they met with him and pat them down, because Honig knew the government has been after him for years.
Hansen and Henson said in their motion to dismiss, filed September 11, that Honig’s absurd legal logic shows this case is really just a public move to show others if you testify against him he will spend big dollars filing frivolous lawsuits against you to hurt your wallet.
Kesner has tried to make a similar move by suing Baker Botts, MabVax’s attorney, for allegedly trying to extort money from him ,in the form of a malpractice settlement, after they found Kesner’s alleged malpractice misconduct in their internal investigation of MabVax. That case was thrown out of the Southern District of New York and Kesner was sanctioned $1,000. It was moved to Southern California district court where Baker Botts is waiting on a judge’s decision to force Kesner to pay all their legal cost because via California anti-slaap laws they say he filed a bully lawsuit.
SRF LLP partner Marc Ross did not respond for comment about the malpractice settlement and would not expand on why Kesner’s LinkedIn profile still says he works at the firm after they removed his name as a named partner in September 2018. Language in the malpractice settlement says MabVax nor its attorney can speak to the media about the settlement or help any additional third parties who also might want to sue Kesner or his former law firm.
Honig is still waiting to settle how much of a monetary fine and disgorgement he will pay in the SEC securities fraud lawsuit. While he agreed to a penny stock ban some of his prior stock positions are now being traded in his wife, Rene, and father Alan Honig name. Court documents show he also has met with the FBI and given a proffer statement and is cooperating with DOJ against others in the scheme.
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