SEC demands sanctions against PlexCoin scammers after their failure to produce information

Maria Nikolova

The people behind a cryptocurrency firm accused of a $15 million ICO fraud have failed to respond to a set of Interrogatories.

The United States Securities and Exchange Commission (SEC) has addressed the New York Eastern District Court informing that the defendants in a cryptocurrency fraud case have once again failed to comply with Court Orders regarding information provision.

In particular, the Commission is displeased with the lack of response to its Interrogatories that sought information from the people behind PlexCorps, aka PlexCoin – Dominic Lacroix and Sabrina Paradis-Royer. The Interrogatories concern electronic mail addresses used by the defendants (or by anyone acting on their behalf) in connection with PlexCoin, their social social media accounts, and the electronic databases created or accessed containing PlexCoin investor information.

On Thursday, May 3, 2018, the Commission informed the Court that the defendants have ignored the April 30 deadline to respond to Interrogatories.

The Commission requests that Defendant Lacroix be ordered to immediately appear for a deposition respecting personal jurisdiction in New York. Furthermore, SEC intends to renew its motion for discovery sanctions against the defendants.

The Commission has already requested such sanctions – in March this year, the regulator informed the Court that the defendants had repeatedly refused to participate in the discovery process and had not complied with Court orders. The list of discovery sanctions includes (inter alia) treatment of the non-compliant actions as contempt of Court, issuing of protective orders, striking a part (or the whole) pleadings, issuing of default judgements against the non-compliant party, as well as payment of certain expenses.

In its complaint, the US regulator says that it has to take an emergency action to stop Lacroix, a recidivist securities law violator In Canada, and his partner Paradis-Royer from further misappropriation of investor funds illegally raised through the fraudulent and unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”.

From August 2017 through the present, the defendants have obtained investor funds, purportedly $15 million from thousands of investors, including those throughout the United States and in the Eastern New York District, through materially false and misleading statements.

Lacroix and Paradis-Royer allegedly misappropriated investor funds and engaged in other deceptive acts relating to investments in the PlexCoin Token, despite having both been enjoined by a Quebec tribunal from engaging in the activities that are the subject of the SEC action.

The case is captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007).

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