US SEC Suspends Company for False Claims

As of 22 October, the American Retail Group, Inc., also known as SIMEX, Inc. was suspended by the Securities and Exchange Commission for false claims on approval. The company has done two press releases back in August claiming to to have a partnership with an SEC-qualified custodian for cryptocurrency related transactions

The said company was also carrying out a public offering which it declared as officially registered and in compliance with SEC requirements.

The Reason for SEC Suspension

In August company, SIMEX Digital Asset Exchange announced the public offering of its shares where they claimed that it has conformed to the official standards set by the SEC.

Public offering meets official SEC requirements. It is intended to use the raised funds to boost the liquidity of the SIMEX cryptocurrency called SMX tokens and develop new services offered by the platform.

SIMEX August Press Release

10 million shares are provided with a price of $20 per share. One preferred share can be converted to 20 SIMEX tokens (SMX). BTC, ETH, LTC, DASH, and EOS can also be purchased by its investors.

An equal amount of shares from the American Retail Group Inc. will be reserved for the holders of SMX. This means that if the shareholder holds on to the preferred shares for 90 days before dividends payout, he/she can receive dividends.

According to SIMEX, additional discount benefits come with owning SMX or paying for services and products using their tokens. The discount rate depends on the quantity of tokens held in an account.

A Call for Caution

The Head of the SEC Enforcement Division’s Cyber Unit, Robert A. Cohen, urged the public to be vigilant as cryptocurrency custodians are not endorsed or qualified by the regulatory body.

In the second week of this month, the SEC published an Investor Alert notifying investors to beware of virtual asset investments that are alleged to be SEC and CFTC endorsed.

Related news

SEC enforcement action leads to disgorgement order against bitcoin trader who claimed Apple management was interested in 3d speaker biz

SEC v. Mahabub, and GenAudio Inc., Civil Action №15-cv-2118-WJM-SKC (D. Col. ordered September 5, 2019)[NMR] Link to order You may not realize it, but most of what we cover at the ole CCM is at a high level about really basic stuff that your parents should have taught you. Stuff like keep your word, don’t lie, don’t cheat, don’t steal, do your best, be honest, eat your vegetables*, and things that are basically common sense. Anyways, if you do those things you likely won’t get in trouble that often in life. Also, it's probably a bad idea to say Steve Jobs is interested in your software if, you know, he isn’t. That tidbit and more are what is at the heart of this recent order out of Colorado in an SEC enforcement action. This filing is an order from the district court judge granting an SEC motion in part for particular remedies against the defendants in this case: Mahabub and GenAudio. Who are the defendants? Well, Taj Mahabub founded a company called, yep, GenAudio. The idea behind the company was to turn any set of speakers into 3D surround sound sounding speakers. Pretty cool idea. Unfortunately, over a period of three years, Mahabub made six public statements that were not true. The statements claimed that Apple, yes that Apple, was very interested in Mahabub’s technology. Now, Mahabub did speak with some mid-level executives at Apple, but he'd told people he was speaking with a global VP and that Steve Jobs was personally interested in the project. Why would he do that? Well, he was also engaged in the sale of unregistered securities for GenAudio during the relevant time period. As loyal CCM readers know the SEC doesn’t like that kind of activity, which is what prompted the enforcement action. Mahabub did not contest the underlying facts of the case, so what is this particular filing about? Well, the SEC moved for a particular remedy in the suit. Namely, the SEC moved for disgorgement of Mahabub’s ill-gotten gains connected to his illegal securities offerings. Mahabub’s lawyers countered that this remedy wasn’t proper in this case, and even if that remedy was proper, it should only be limited to $15,000 of loss that the SEC proved. The Court in this order was having none of that. So, what about crypto? Well, the SEC provided a declaration from an accountant named McDevitt who spoke with Mahabub starting on July 2017, and who over the course of a year and more Mahabub confided the following: • he owns a recording studio in California worth over $10 million; • he owns a yacht in Panama and land in Costa Rica; • he has made significant profits trading in Bitcoin; • he has started a new company to create software for automated cryptocurrency trading, and has contracts for work in that field; and • he is deliberately hiding assets from the SEC. That doesn’t look great for Mahabub, but then the Court points out the following, which is somehow worse: Interestingly, he nowhere denies making the claims that McDevitt reports — indeed, he does not mention McDevitt at all. He instead directly denies owning a recording studio, a yacht, or real property; denies having profited from foreign currency trading (although he does not mention Bitcoin trading); and denies having real business prospects with his cryptocurrency software. Yeah, that’s not good. The Court goes on to say that it has no reason to believe Mahabub that he doesn’t have any money. So, what penalty is he looking at? Well, Mahabub owes $1,280,900, and his company GenAudio owes $4,503,000. Don’t do the frauds. If you do, own up to it and don’t try and hide your assets from the SEC. Mahabub is gonna have to pay. He’ll likely appeal, and if so we'll see if an appellate court is any more sympathetic to the arguments. *Vegetables are good for you bitcoin carnivores. Sorry, not sorry. Disclaimer: Crypto Caselaw Minute is provided for educational purposes only by Nelson Rosario and Stephen Palley. These summaries are not legal advice. They are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.
The Block Crypto

SEC and BitFunder’s Operator Will Conclude Settlement Deal Next Month

The United States’ SEC (Securities and Exchange Commission) and BitFunder together submitted a filing on Friday night in which they announced that a settlement was finalized. According to the document, the terms and details of the deal will be announced in October. For reference, the SEC’s settlement is with the entity that operates BitFunder, which is a closed Bitcoin securities exchange platform. Its owner, Jon Montroll, is currently serving a 14-month sentence in jail for charges that include obstruction of justice and fraud involving securities. Roughly $170,000 in Fines The former executive was also ordered by the authorities to pay approximately $170,000 in fines after he pleaded guilty to the mentioned charges two months ago. Both entities confirmed the latest development on Saturday and informed that the SEC was waiting for the criminal process against the now-imprisoned Montroll to end to offer its finalized recommendation on the case. The jointly published document stated that both the SEC and BitFunder advised the Court to prompt the Judge in the specific case to have a hearing back on September 10, 2019, to make a decision that involved restitution, and that would be enough to put an end to the criminal proceedings. The day of the hearing, the judge running the case requested what is called proposed restitution orders from both entities involved, although no determination was made at that moment. The Case is Still Ongoing According to the former executive’s lawyer team and the SEC, an official determination should be expected sometime next month. As a result, the case is still considered in the process, and both parties are considering updating its status around the middle of October. Montroll used to run WeExchange Australia, which was a BTC depository and exchange platform. Of course, he also managed BitFunder, an ecosystem that let customers sell virtual shares of several enterprises while receiving crypto assets in return. The SEC decided to perform an investigation on Montroll over a failed disclosure of a cyber attack made by people related to the BTC venue Ukyo. The receiving end was BitFunder, and over 6,000 BTC were stolen at the time. Montroll failed to disclose the hacking event and instead, chose to keep asking for investments. Later down the road, he was also accused of fraud because he took BTC of WeExchange’s clients for himself and sold them for fiat currency. The post SEC and BitFunder’s Operator Will Conclude Settlement Deal Next Month appeared first on FXTimes.com - Daily Cryptocurrency and FX News.
Cryptovibes

Hot news

By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.