Virtual currency scammers and SEC clash over PlexCorps’ suability

Maria Nikolova

There was no legal representative for PlexCorps, which is estimated to have misappropriated $15 million from thousands of investors, at the court conference last week.

The suability of PlexCorps, the virtual currency scheme which is alleged to have defrauded thousands of investors of at least $15 million, has emerged as a point of disagreement between parties in a lawsuit brought by the United States Securities and Exchange Commission (SEC).

The lawsuit targets 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 said that it had 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”.

The individual defendants in the action – Dominic Lacroix and Sabrina Paradis-Royer, were represented at a telephonic conference held before Judge Carol Bagley Amon of the New York Eastern District Court last week. The SEC was also represented. Defendant PlexCorps, however, has not appeared in this action.

It turns out that while the US regulators insist that PlexCorps is a suable unincorporated organization, counsel for the individual defendants asserts that PlexCorps is not a suable entity.

Let’s note that PlexCorps has been sued in Canada. On Friday, December 8, 2017, the Honorable Judge Marc Lesage of the Superior Court of Quebec issued a two-month prison sentence and a fine of $110,000 to Mr Lacroix and DL Innov, doing business as PlexCorps and PlexCoin. The decision was made after in October this year, the Superior Court of Quebec found Dominic Lacroix and DL Innov inc guilty of contempt of court.

In the face of the disagreement between the SEC and the individual defendants over whether PlexCorps is a suable entity, the company will have to comply with the latest order issued by Judge Carol Bagley Amon. On Friday, she agreed with the SEC to extend temporary restraining orders, asset freeze orders, and orders against destruction of documents. These orders were set to expire on Tuesday, December 12, 2017. The regulator wants them to be extended until the conclusion of a hearing to show cause, which is now rescheduled for March 2018.

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