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

Digital Assets

AAX ranked world’s second largest spot exchange, only behind Binance

Crypto trading volumes experienced their first surge in activity since March as the majority of digital assets began their recovery from the recent grim price action, according to a new report by Cryptocompare.

Digital Assets

Bitpay teams up with Cardlytics to provide 15% cashback rewards

Crypto payment service provider Bitpay announced a partnership with Cardlytics Inc (NASDAQ:CDLX), which it says will offer more rewards for BitPay cardholders on its platform.

Digital Assets

BlackRock digs further into crypto with spot bitcoin private trust

BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has launched a spot bitcoin private trust for institutional clients in the United States.

Digital Assets

SEC fines Bloom Protocol, orders refund to BLT token purchasers

Blockchain startup Bloom, which raised $30 million in funds via an initial coin offering (ICO), has agreed to return the money to token purchasers and pay a $300,000 fine, the SEC announced.

Institutional FX

FX volume takes step back at Singapore Exchange in July

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Market News

The Week Ahead: 12 August from David Madden, Market Analyst at Equiti Group

There was a spike in volatility last week when the US CPI report ticked down to 8.5% from 9.1%, missing the forecast of 8.7%. The announcement led to chatter the Fed might not carry out a 0.75% interest rate hike in September.

Digital Assets

Pomelo Pay adds crypto payments capabilities from TripleA

According to a June survey conducted by Deloitte, nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years.

Executive Moves

Talos appoints “boss, mentor, and friend” Neal Pawar as strategic advisor

“Foundational technologies are needed for institutions to fully embrace this potential, however, and in my opinion Talos’s platform is steadily becoming the de facto industry standard for digital asset trading.”

Technology

Avelacom enhances Middle East connectivity amid new market trends

Avelacom found that smaller markets in the region were not sufficiently covered by third-party vendors.

<