Business

Steve Kaaru

SEC inks $7 million settlement with ICO issuer PlexCorps

The U.S. Securities and Exchange Commission (SEC) has agreed a settlement with initial coin offering (ICO) issuer PlexCorps. The settlement will see the founders of the embattled startup pay huge fines and also pledge to never engage in securities sales again. A judge has yet to sign off on the settlement.

The SEC has been after PlexCorps and its proprietors for the past two years now. In December 2017, the regulator filed charges against Dominic Lacroix and Sabrina Paradis-Royer for the sale of securities in the U.S. without registration. The SEC has obtained several other court orders since then, but the case has dragged on, until now.

Lacroix and Paradis-Royer agreed to a civil penalty, with part of the settlement stating:

Defendants are jointly and severally liable for disgorgement of $4,563,468.62, representing certain profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $348,145.25, for a total of $4,911,613.87. Defendant Lacroix is liable for a civil penalty in the amount of $1,000,000. Defendant Paradis-Royer is liable for a civil penalty in the amount of $1,000,000.

The settlement also required the two founders to agree to never participate in a securities sale again, and also to never commit fraud.

The defendants were satisfied with the settlement, their lawyer, Jason P. Gottlieb stated. He added, “PlexCorps is pleased to achieve this settlement with the Securities and Exchange Commission, in which it is cooperating with the SEC to ensure that U.S. purchasers of Plexcoin will be eligible to receive a refund directly from the SEC.”

The settlement brings to a close one of the biggest debacles between the securities regulator and a crypto company. In June 2018, the SEC obtained a court order that froze assets linked to PlexCorps. The SEC announced at the time that the order was necessary as it had been discovered Lacroix was using secret accounts to dissipate some of the crypto obtained from the ICO for his own personal use.

The controversial Lacroix was also jailed by a Canadian court in December 2017, after the presiding judge determined that he had continued to engage in the sale of PlexCoin. The judge sentenced Lacroix to two months in prison on top of an $110,000 fine.

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