Court grants SEC’s motion for terminating sanctions in lawsuit against Blockvest
The Court concludes that the evidence establishes that Blockvest and Reginald Buddy Ringgold willfully filed false declarations to defend against the SEC allegations.
Judge Gonzalo P. Curiel of the California Southern District Court has agreed with the recommendations issued by the Honorable Michael S. Berg in an action brought by the Securities and Exchange Commission (SEC) against Blockvest, LLC and Reginald Buddy Ringgold, III a/k/a Rasool Abdul Rahim El.
As FinanceFeeds has reported, this action concerns an unregistered securities offering. The SEC alleges that Blockvest and Ringgold, Blockvest’s founder and principal, offer and sell unregistered securities in the form of digital assets called “BLVs,” and seeks to stop investment fraud involving an initial coin offering (ICO) by the defendants. The SEC contends that the defendants falsely claim that their ICO has been “registered” and “approved” by the SEC and other regulators. The SEC further alleges that the defendants created a fictitious regulatory agency, the Blockchain Exchange Commission (“BEC”), in order to create legitimacy and an impression that their investment is safe.
In January 2020, the SEC filed a motion for terminating sanctions, arguing that the defendants willfully and in bad faith deceived the Court by filing forged and false declarations in support of their opposition to the SEC’s motion for a preliminary injunction. The SEC asserts that subsequent discovery revealed that the filed declarations “obscured critical details” that the declarants were unaffiliated individuals who were provided Blockvest’s fraudulent promotional materials by the defendants and their commissioned sales agents before their investments, and that at least four of the declarations were knowingly deceptive or forged.
In April 2020, the Honorable Michael S. Berg sided with the SEC by finding that the defendants’ submission and reliance on the false and fraudulent declarations at issue was willful and constitutes bad faith. The filing of the forged declaration, the breadth of the falsehoods in the declarations, the defendants’ failure to correct or withdraw the declarations, and Ringgold’s attempt to conceal the wrongdoing, demonstrate that the defendants intentionally presented false evidence to the District Court, the Magistrate Judge said.
As a result, the Honorable Michael S. Berg recommended finding that Blockvest and Ringgold acted willfully and in bad faith.
On May 29, 2020, Judge Gonzalo P. Curiel issued an order adopting the recommendations of the Magistrate Judge. The Court finds that the evidence establishes that the defendants willfully filed false declarations to defend against the SEC allegations, and, in so doing, willfully deceived the Court and adversely affected the administration of justice.
The Court granted the SEC’s motion for terminating sanctions as to the defendants and ordered that default judgment is entered against the defendants as to all claims in the complaint.