US Securities and Exchange Commission announced yesterday that they had settled fraud charges against Loci Incorporation and its CEO John Wise for making materially false statements about their unregistered offer and the sales of their digital asset securities.
The SEC had initially accused Loci of defrauding investors with false and misleading statements related to their initial coin offering. According to the claims the SEC made, Loci made close to $7.6 million from August 2017 to January 2018.
As the SEC reports it, Loci provided an intellectual property search service for investors through a software platform-InnVenn where they sold their digital coins called LOCIcoin. In order to promote the ICO, Loci made misleading statements on the company’s revenue, its employees, and user base.
The SEC order found Loci’s CEO, John Wise, guilty of misappropriating $38,163 of investor proceeds to fund his personal outlay. Additionally, Whereas LOCIcoins constituted securities, the offering had not been registered with the regulatory body and, therefore, no exemption from the lawsuit.
Without admitting or denying the allegations, Loci agreed to the cease and deceased order with accompanying consequences.
The slate has now been wiped clean with a civil penalty that equals the alleged returns Loci Incorporation made from the coin.
Next Cause of Action
As part of the settlement, Loci Incorporation will have to destroy all the remaining tokens and remove them from all crypto exchanges. Additionally, Loci Incorporation has been oathed with the refrain from undertaking similar security offerings.
As it should be, Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, re-enforces that investors in digital asset securities are entitled to truthful information. In question to the matter, she answers,
“Loci and its CEO misled investors regarding critical aspects of Loci’s business. Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.”