SEC’s efforts to get help from Quebec Superior Court encounter PlexCoin objections

The United States Securities and Exchange Commission (SEC) is facing some opposition to its efforts to secure the assistance of the Quebec Superior Court in a virtual currency scam case. On Thursday, March 8, 2018, the defendants in the case targeting PlexCorps aka PlexCoin and Sidepay.ca, Dominic Lacroix and Sabrina Paradis-Royer, filed a Memorandum of Law in Opposition to SEC’s Motion to get such assistance.

The document, seen by FinanceFeeds, says that “the SEC is overreaching once again”.

Let’s recall that the SEC is requesting the assistance to compel the attendance of witnesses at oral depositions and the production of documents. The documents requested from defendants Lacroix and Paradis-Royer include all communications or documents concerning any contacts between the defendants and the United States with respect to PlexCorps and the PlexCoin Initial Coin Offering.

In addition, the Commission has learned that certain current and/or former employees of PlexCoin, including Yan Ouellet, Daphnée Verdon-Martin, and Antoine Richard, may have information relevant to the claims against the defendants, as well as information relevant to personal jurisdiction. That is why, the Commission is asking the Quebec Court to compel Ouellet, Verdon-Martin, and Richard, who are all residents of the Province of Quebec, Canada, to comply with document requests.

According to the defendants, however, the SEC has requested assistance in obtaining “incredibly broad discovery over defendants and third parties, when the only issue presently before the US Court is this Court’s personal jurisdiction over the defendants”. Also, according to them, the SEC is basing its requests on evidence that it is not presenting to the US Court, and has not made available to the defendants for examination and testing. The SEC asserts that it has information about the knowledge of certain witnesses, but it presents no evidence to the Court for that assertion, the defendants say.

The defendants also argue that the requests to them for any documents beyond those relevant to personal jurisdiction are improper. All of the requested documents regarding non-U.S. Addresses, communications, etc., are also said to be not currently material, and thus, are not a proper subject of letters rogatory.

The case, captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007), continues at the New York Eastern District Court.

The lawsuit was launched in December 2017, with the SEC alleging that the defendants orchestrated a $15 million initial coin offering (ICO) scam. The SEC’s Complaint says, inter alia, that PlexCoin and the other defendants in this case misled investors in connection with the offer and sale of digital assets known as PlexCoins, in the United States, including with misstatements and omissions about the PlexCorps “team” size, expertise and place of business, and about the true use proceeds of the PlexCoin Initial Coin Offering.