SEC Charged Firms Failed to Repay Investors
Several firms charged by the SEC (Securities and Exchange Commission) have raised as much as $40 million from unregulated initial coin offerings (ICOs) in 2017. But they have missed their deadlines to repay investors after the charges from the SEC.
On November 14, the firms already agreed to repay investors or provide more transparency in a deal of lower fines.
Airfox and Paragon Coin failed to meet the deadline in repaying investors who bought their tokens at their given price. Then, the third startup is over five months late on, giving its investors the required information for deciding whether they want refunds.
Out of the three firms, two are mobile banking startup Airfox and the cannabis blockchain platform Paragon Coin. And they both agreed to pay $250,000 fines as part of the settlement in November last year. In exchange for that, they have never accused the firms of fraud. Also, the companies need to deliver their offering under SEC oversight and offer a refund to investors.
Steve Peikin, co-director of SEC enforcement, stated, “These orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws.”
Then, the third firm, cybersecurity startup Gladius, did not pay any penalty to the SEC after it settled. And the regulator provided credit for self-reporting its violations. Now, they all required the three companies to submit registration statements.
The Letter From The SEC
Furthermore, Both Airfox and Paragon filed the forms. However, Paragon did not answer the letter from the SEC. And it is about its accounting and shareholder rights. The firm, moreover, failed to issue quarterly updates for its investors since registering its tokens with the SEC in March.
On the other hand, Gladius needed, by the terms of is settlement, to file the registration statement by May 20. However, it claimed that they extended the deadline to November 18.
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