SEC reiterates motion for contempt against PlexCoin’s mastermind Dominic Lacroix

Maria Nikolova

The regulator says that evidence it has gathered from third parties in discovery shows Lacroix has continued to violate a temporary restraining order.

Shortly after the United States Securities and Exchange Commission (SEC) amended its complaint against cryptocurrency scheme PlexCorps, aka PlexCoin, and the people behind the scam – Dominic Lacroix and Sabrina Paradis-Royer, the regulator addressed the New York Eastern District Court explaining why its contempt motion concerning Lacroix is still relevant.

In a Letter to the Court, filed on Monday, March 4, 2019, the SEC argues that the Contempt Motion is not moot. The thrust of the Contempt Motion, the regulator says, was and remains that “Lacroix transferred some . . . Bitcoin . . . into accounts at a Canadian digital asset exchange . . . for conversion into fiat currency, and spent it on personal expenses,” after the Court entered the December 1, 2017 temporary restraining order and asset freeze.

“Nothing that has occurred in this litigation since the filing of the Contempt Motion has rendered moot Lacroix’s past contemptuous acts. To the contrary, the evidence the SEC has gathered from third parties in discovery appears to preliminarily show that Lacroix has continued to affirmatively violate the TRO even after the SEC filed the Contempt Motion”, the SEC says.

Nevertheless, given that discovery is nearing its conclusion and that the SEC may seek additional contempt based on Lacroix’s more recent conduct, and in order to conserve judicial and litigant resources, the SEC requests that the Court hold the Contempt Motion in abeyance (or deem it withdrawn without prejudice to refile) for sixty days.

In December 2017, the SEC took PlexCorps and the people behind the scheme to Court over an unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”. The amendments to the complaint, filed in February 2019, relate to additional deceptive acts and misstatements by the defendants, including statements relating to the amounts of funds raised during the PlexCoin ICO.

The SEC alleges that the defendants manipulated the amount of PlexCoin sold during the ICO, permitting them to sell PlexCoin to certain investors at inflated prices and to give the impression that the PlexCoin ICO was more successful than it actually was.

As alleged in the Amended Complaint, the defendants lied to investors about the amount of funds raised in connection with the PlexCoin ICO. Initially, that amount was said to be nearly $15 million but now it turns out to be approximately $8.5 million. Put otherwise, the defendants lied about the success of the ICO in order to lure more investors.

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