Platinum Partners, Sentinal Node Mapping and the Unintended Consequences of Charlatans

Steve Kanaval  |

On the banks of the Sciota river flows a river of hope for many Ohioans. Dublin, Ohio is a typically Midwestern town outside Columbus where the economy revolves around Ohio State Football and Jack Nicholas golf courses. It is now an affluent town where the mature, well-off business people settle and send their kids to private schools and play golf and tennis at lush country clubs. It is also the home of a small Biotech company looking to make strides in in the diagnosis and treatment of cancer, cardio-vascular disease, rheumatoid arthritis and other diseases. The company is Navidea Biopharmaceuticals, Inc (NAVB) and as recently as 2012 had a valuation above 500 million (market capitalization) and was a biotech sector investment for many in and out of Ohio. But in hindsight they were unlucky when Platinum Partners decided to accumulate 14 million shares and begin a road which led to the arrests of the founders and portfolio managers of Platinum Partners who held biotech shares like NAVB .

I’m certain at first it was a godsend – this multi-billion dollar hedge fund - was poking around and starting to accumulate a report-able position in their stock. Platinum Partners added volume, volatility, stability and price appreciation, and NAVB needed a suitor as shares had fallen from $5 in 2011 to $2 losing 60% of its value in 2011 alone. It is not clear when Platinum and the fund partners started to accumulate a position, but shares have experienced volatility the entire decade, and were ripe for an institutional player like Platinum. It amazes me to see how this all turned so wrong - so fast - as a liquidation team was assigned a few short years later by regulators - to exit shares for those to be charged, and Navidea was about to experience the painful unintended consequences of being associated with Platinum and it's partners.

Now imagine you are a shareholder and in the summer of 2016 you get wind of the FBI poking around asking questions, and what you find is the Platinum Partner fund bosses have been running a classic Ponzi Scheme. They tell you not to worry, but the next few quarters turned into a nightmare, culminating with the recent arrests of the two charlatans below, with many more associated with the fund about to be hit by shrapnel.


Shares started selling off in May 2016 when the company had a valuation near $200 million while a heavy handed liquidator was pouncing on any bid selling these shares badly into a falling market. By September share price had fallen from $1.50 p/s to under .30 cents, and news was swirling about toxic lending, a new CEO and fix it consultants. No one really knew the real story - except Platinum - who had authored the deception. The Government, the SEC and FBI, through an appointed liquidator, was now a seller of shares and the shareholders were in for a ride. But the greed and irresponsibility of Mark Nordlicht and David Levy was evident as their actions were nothing more than rearranging the deck chairs on the Titanic. Keep in mind the Platinum Partners kept tickets in the desk drawer ready to jump on the next plane and leave this mess for others to clean up.

These charlatan imposters cast shrapnel upon a fledgling company with a great midwestern work ethic, and when held up to the light contrasts greatly against these greedy manipulators. In the end we will see exactly what Navidea Biopharma did wrong here (everything always comes out). The shares are under pressure and not a retail investing soul gets the nuance of the story, shares in NAVB have been about deception from the moment Platinum Partners bought it's first share. Longtime shareholders have been lighting up my inbox with facts, and initially I got an important part of this story wrong. But what I've learned over the years is that it all comes out - everything. So follow the money, and listen. This is an unwind story where valuation is yet to be determined. No one knows what this stock is worth as we head out of 2016, if they tell you they do - they are lying.

The news of Platinum Partners will reverberate through equity markets well into 2017 and shareholders and employees of Navidea (NVDB) are left forcibly to tell the story over and over again to those who will listen and not judge. Shame on you Mark and David, you are now in the category where you belong .......alongside Bernie Madoff. The thing I am not sure about is who left at this company has not been hit by the shrapnel of a charlatan.

Please send a note to us at content@equities.com. I am happy to review all information related to this stock, or any like it. If there are any similar stories we should look at for you - our valued readers - send a note to our team at Equities.

Full disclosure: We have no position in Navidea Biopharma, not are we paid by the company to write about them, and we have never been employed or paid by Platinum Partners. We have never held any shares of any stock related to the Platinum Portfolios.

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Companies

Symbol Name Price Change % Volume
NAVB Navidea Biopharmaceuticals Inc. 0.59 0.01 1.72 152,482
PED Pedevco Corp. 1.67 0.02 1.21 9,758
ECTE Echo Therapeutics Inc. 0.00 0.00 0.00 2,008

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