SEC takes PlexCoin scammers to court over securities laws violations

Maria Nikolova

The United States regulator takes an emergency action to stop Lacroix, a recidivist securities law violator in Canada, and his partner Paradis-Royer from further misappropriation of investor funds.

Scams related to initial coin offerings (ICOs) are flourishing, with regulators across the globe trying to clamp down on these fraudulent schemes. The latest example comes from the United States, where the Securities and Exchange Commission (SEC) on Friday launched a lawsuit against scammers PlexCorps aka PlexCoin and Sidepay.ca, Dominic Lacroix and Sabrina Paradis-Royer.

In its complaint, filed with the New York Eastern District Court, 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.

SEC notes that the ICO for the PlexCoin Tokens was an illegal offering of securities because there was no registration statement filed or in effect during its offer and sale, and no applicable exemption from registration. The PlexCoin ICO was a general solicitation made using statements posted on the Internet and distributed throughout the world, including in the United States, and the securities were offered to the general public and have been sold to a large number of investors, including many in the United States and in the Eastern District of New York.

To avoid the registration requirements of the federal securities laws, Lacroix has attempted to refashion the PlexCoin Tokens as a “cryptocurrency” and likened them to Bitcoin, SEC explains. In reality, the regulator says, PlexCoin Tokens are securities within the meaning of the U.S. federal securities laws.

The illegal PlexCoin ICO has occurred despite Lacroix being the subject of previous orders by the Quebec Financial Markets Administrative Tribunal enjoining him from future violations of the Quebec Securities Act, and despite having pled guilty before a Quebec court of securities fraud.

SEC’s Complaint says the defendants violated securities regulations in the United States, including the Securities Act of 1993 and the Securities Exchange Act of 1934.

The Commission is seeking a restraining order and an injunction against the defendants to prevent them from further violations of the laws and regulations. It also seeks an order freezing the defendants’ assets. Civil monetary penalties are also sought, as well as disgorgement of ill-gotten gains.

As FinanceFeeds reported in November, Quebec’s financial markets authority AMF is requesting a prison sentence for Mr Lacroix, with the local court yet to rule on the matter.

Read this next

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

Industry News

DeFi firm Aurox launches SEC-compliant crowdfunding campaign on tZERO

“This is a great opportunity for us to raise capital from our community and the broader public on a leading fully regulated platform. We are confident that the tZERO Markets platform will provide us with the exposure and reach we need to attract a diverse investors to support our business growth.”

<