U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission


Litigation Release No. 23546 / May 27, 2016

Securities and Exchange Commission v. BioChemics, Inc., et al., No. 12-12324-MLW (D. Mass. filed Dec. 14, 2012)

SEC Obtains Final Judgment Against Promoter of Massachusetts-Based BioChemics, Inc.

The Securities and Exchange Commission ("Commission") announced today that on May 25, 2016, the Honorable Mark L. Wolf, United States District Court for the District of Massachusetts, entered a final judgment against Craig Medoff of Boston, Massachusetts, a defendant in a previously-filed enforcement action. Among other things, the judgment requires Medoff to pay over $100,000 and prohibits him from participating in the issuance, offer, or sale of any security (expect for his own personal purposes) for ten years.

In December 2012, the SEC charged BioChemics, Inc. ("BioChemics"), a private biopharmaceutical company based in Danvers, Massachusetts, its founder and CEO, John J. Masiz, and two other individuals affiliated with the company, Medoff and Gregory S. Kroning, with fraudulently raising at least $9 million from investors. The SEC's complaint alleged that the defendants, while raising proceeds from investors, misrepresented, among other things, the status of BioChemics' collaborations with certain pharmaceutical companies, the results of clinical trials for BioChemics' drugs, and that certain claimed valuations of BioChemics of between $500 million and $2 billion were independent and reliable when they were not. The complaint also alleged that Medoff induced or attempted to induce the purchase of BioChemics securities without being registered as a broker.

Without admitting or denying the allegations in the complaint, Medoff consented to the entry of a final judgment that permanently restrains him from violating (i) the antifraud provisions of the securities laws [Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder], and (ii) the broker registration provisions of the federal securities laws [Exchange Act Sections 15(a) and 15(b)(6)(B)]. The judgment also permanently restrains Medoff for ten years from participating in the issuance, offer, or sale of any security; provided, however, that nothing prevents Medoff from purchasing or selling securities for his own account. Finally, the judgment orders Medoff to pay a total of $14,370 in disgorgement and prejudgment interest and a civil penalty of $100,000.

On March 18, 2015, the Court entered a consented-to judgment permanently enjoining BioChemics from violating the antifraud provisions of the securities laws. On March 25, 2015, the Court entered a supplemental judgment against BioChemics, requiring the company to disgorge $15,105,325 in ill-gotten gains plus prejudgment interest of $2,042,559, and pay a civil penalty of $750,000. On May 25, 2016, the Court entered a modified judgment extending by one year the time for BioChemics to pay the amounts due under the supplemental judgment.

Also on May 25, 2016, the Court entered an order granting the Commission's motion to dismiss its complaint as to Kroning, who passed away in April 2016.

The Commission's case continues against Masiz.

For further information, see Litigation Release Nos. 22572 (Dec. 14, 2012) [filing of complaint], and 23220 (Mar. 25, 2015) [BioChemics judgment].



Modified: 05/27/2016