Crypto News
PlexCoin ICO’s fraudulent proprietors ordered to pay nearly $7 million for defrauding investors
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The SEC has obtained a final judgment against PlexCoin’s fraudulent ICO and its proprietors, finding the defendants in the case guilty for violating antifraud provisions of Federal security laws. They were ordered to pay nearly $7 million on 2 October, 2019.
The SEC had filed a complaint against PlexCorps and its proprietors, Lacroix and Paradis-Royer, on 1 December 2017, accusing them of fraudulently raising millions of dollars through an unregistered security offering called PlexCoin. The defendants in the case neither denied or admitted to the allegations, but were enjoined in several sections of the Security Act and were enjoined from participating in any digital securities offerings as well.
The SEC in its complaint accused the proprietors of misleading potential and actual investors by providing false information about the size and scale of PlexCorps’ operations, the money raised in the ICO, and its use, while also orchestrating an elaborate fraud.
The final judgment
In the final judgment, the defendants in the case were ordered to forego all investor funds seized by the Superior court of Quebec, totaling to an amount of $4 million, along with another $800,000 in investor funds that were frozen by the District court. The court will also be taking action to reimburse harmed investors via Autorité des marchés financiers of Quebec.
This year has seen several cases where many fraudulent ICOs and unregistered security offerings have come to a settlement, including the likes of SiaStock and Block.One’s EOS offering. Such settlement cases are meant to send out a strong message to the market, warning scamsters against carrying out such fraudulent schemes. On the other hand, investors must also focus on finding the right projects for investments and should not fall for potential scams that promise hefty returns, without providing a realistic roadmap for achieving it.
It shuld also be noted that many would characterize such settlements as merely a slap on the wrist. Block.one’s case for instance, saw a settlement that was just a small percentage of what the firm raised in its ICO back in 2017.
