SEC action brings ICO scam to screeching halt
The U.S. Securities and Exchange Commission has obtained an emergency asset freeze to stop an alleged ICO fraud that has raised as much as $15 million from thousands of investors since August.
SEC charges filed in federal court in Brooklyn, New York, allege that Quebec-based Dominic Lacroix and his company, PlexCorps, falsely promised a 1,354 percent profit within 29 days to buyers of PlexCoin. An SEC press release described Lacroix as "a recidivist securities law violator."
The SEC complaint charges PlexCorps, Lacroix and his partner, Sabrina Paradis-Royer, with violating the antifraud provisions. It additionally charges Lacroix and PlexCorps with violating the registration provision of U.S. federal securities laws.
Based on the filing, the SEC obtained an emergency court order to freeze the assets of Lacroix, Paradis-Royer and PlexCorps, the release said.
In addition to permanent injunctions, disgorgement plus interest and penalties, the SEC seeks an officer-and-director bar against Lacroix and Paradis-Royer, and a bar preventing either from offering digital securities.
The charges are the first from the SEC Cyber Unit, which was formed in September to focus on misconduct involving distributed ledger technology and initial coin offerings, as well as the spread of false information through electronic and social media, hacking and threats to trading platforms.
"This first Cyber Unit case hits all of the characteristics of a full-fledged cyberscam and is exactly the kind of misconduct the unit will be pursuing," Cyber Unit Chief Robert Cohen said in the release. "We acted quickly to protect retail investors from this initial coin offering's false promises."