Telegram liable for $1.22bn in disgorgement, according to proposed judgment in SEC case
Telegram Group will have to pay a civil monetary penalty of $18.5 million.
The United States Securities and Exchange Commission (SEC) is getting nearer to a close of its proceedings against Telegram Group Inc. and TON Issuer Inc.
Earlier today, the regulator filed a proposed final judgment with the New York Southern District Court. The document, seen by FinanceFeeds, says that the defendants consented to entry of the Final Judgment without admitting or denying the allegations of the SEC’s Complaint (except as to jurisdiction).
The judgment states that the defendants are jointly and severally liable for disgorgement of $1,224,000,000. Telegram Group is liable for a civil penalty in the amount of $18,500,000.
If at any time following the entry of the Final Judgment the Commission obtains information indicating that the defendants knowingly provided materially false or misleading information or materials to the Commission or in a related proceeding, the Commission may, at its sole discretion and without prior notice to the defendants, petition the Court for an order requiring the defendants to pay an additional civil penalty.
The defendants are also ordered, for a period of three years beginning on the date of entry of the Final Judgment, to give to the SEC 45 days’ notice before the defendants participate, directly or indirectly, in an issuance of “cryptocurrencies,” “digital coins,” “digital tokens,” or any similar digital asset issued or transferred using distributed ledger technology.
The defendants are permanently restrained and enjoined from violating Section 5 of the Securities Act of 1933 (“Securities Act”).
Let’s recall that this action was launched in October 2019. Back then, the SEC took an emergency action and obtained temporary restraining order against Telegram Group Inc. and its wholly-owned subsidiary TON Issuer Inc. The entities allegedly conducted an unregistered, ongoing digital token offering which has raised more than $1.7 billion of investor funds.