Business

Dennis Wafula

NextBlock, OSC seek settlement over misleading disclosure allegations

The Ontario Securities Commission (OSC), NextBlock Global Limited, a venture capital company, and its CEO, Alex Tapscott, recently filed for a public settlement hearing according to the filing dated May 9.

According to a statement of allegations released Thursday morning, Tapscott and NextBlock Global Ltd. were accused of making “untrue and misleading” representations in presentation slides offered to over 100 prospective investors in a private placement that raised $20-million in July 2017.

Reportedly, Investors were shown slide decks that falsely portrayed various well-known figures in the blockchain industry as NextBlock advisors. Among the purported investors included Kathryn Haun (federal prosecutor), Vinny Lingham (Civic CEO), Karen Gifford and Vitalik Buterin, who were pictured in the investor slide decks. Additionally, NextBlock did not inform these individuals that they were being purported as advisors to the project.

A source in both the traditional investment and blockchain communities in Canada said, “You don’t know how many people I know who run hedge funds told me they were investing [in NextBlock] because he had someone from Coinbase involved.”

To defended himself, Tapscott said, “This is all so ridiculous because I’m not raising money on the back of these advisors.”

At the end of 2017, Forbes revealed the investor slide debacle and forced Tapscott to refund Nextblock investors. The company was forced to abandon its plans for a public listing on the Toronto Stock Exchange. Tapscott stated:

“Today we announced that NextBlock Global would not be proceeding with a go-public transaction. After careful consideration, we have concluded that the best course of action is to return to existing investors their capital in full and also to have them participate in any profits. As a young company, we have stumbled in our efforts to take our company public, and we will work hard to rebuild the trust of those we have disappointed.”

In the expose, the purported advisors denied being Nextblock’s advisors.

In April this year, Tapscott, Nextblock Global and the OSC entered into a preliminary settlement agreement over the matter. There is an upcoming May 13 hearing that will determine whether the OSC will approve the agreement reached between the staff of the commission and Nextblock.

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