The U.S. Securities and Exchange Commission (SEC) has filed charges against the organizers of the PlexCoin initial coin offering (ICO).
Citing marketing materials that promised investors could net a 1,354 percent profit on their holdings in less than 29 days, the SEC charged Quebec residents Dominic Lacroix and Sabrina Paradis-Royer, along with PlexCorps — Lacroix’s company — with violating anti-fraud regulations connected to the ICO. Lacroix and PlexCorps were also charged with violating the requirement to register all securities offerings with the SEC.
According to an SEC statement, PlexCorps had raised as much as $15 million from the PlexCoin ICO, which began in August. The Commission has obtained an emergency asset freeze against PlexCorps while the case is litigated.
These are the first charges filed by the SEC’s new cyber task force, which launched in September to combat a range of cyber-related threats including ICOs.
“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing,” said Robert Cohen, chief of the cyber unit, in a statement. “We acted quickly to protect retail investors from this initial coin offering’s false promises.”
The SEC complaint was filed in federal court in Brooklyn, New York, and it seeks permanent injunctions, disgorgement plus interest, and penalties. The SEC also requests that the court bar the PlexCoin ICO organizers from offering digital securities in the future. Labelling Lacroix a “recidivist…securities law violator,” the complaint finally seeks to bar Lacroix from serving as a director or officer of a public company.
As CCN.com reported in October, Lacroix and the other PlexCoin organizers had already run afoul of the Autorité des marchés financiers (AMF), Quebec’s chief financial regulator. On October 20, the Quebec Superior Court held Lacroix in contempt for violating an earlier ruling that barred him and his associated companies from holding an ICO in or soliciting investors from the province.
However, that was not Lacroix’s first run-in with the AMF. In 2013, he and one of his companies pleaded guilty to six counts of “illegal placement, illegal practice, and transmission of false or misleading information” and were fined $25,000 CAD.
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Last modified: March 4, 2021 5:02 PM