SEC Obtains Court Order Against ICO for False Endorsements Including PayPal and Boeing
The US Securities and Exchange Commission has obtained a court order to halt the activities of a fraudulent ICO.
The US Securities and Exchange Commission (SEC) has obtained a courter order to halt the activities of an initial coin offering (ICO) that defrauded investors, the SEC announced May 29. According to the SEC press release, Titanium Blockchain Infrastructure Services Inc. has raised $21 mln from investors both in and outside the US.
A complaint from the SEC that was unsealed today alleges that Titanium President Michael Alan Stollery, or “Michael Stollaire”, lied about business relationships with the Federal Reserve and dozens of well known firms such as Boeing, Verizon, PayPal, and Walt Disney.
The SEC filing also claims that Stollaire publically and fraudulently claimed to have relationships with numerous corporate clients, and that fabricated testimonials were posted on the Titanium website. According to the press release, Stollaire promoted the ICO through videos and social media, comparing investing in Titanium to investing in “Intel or Google.” Chief of the SEC Enforcement Division’s Cyber Unit Robert A. Cohen stated:
“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects. Having filed multiple cases involving allegedly fraudulent ICOs, we again encourage investors to be especially cautious when considering these as investments.”
Regulators first filed the complaint on May 22 in the federal district court of Los Angeles. They are charging both Stollaire and Titanium with violating anti-fraud and registration provisions of federal securities laws. The SEC is seeking preliminary and permanent injunctions, including the return of “ill-gotten gains” with penalties and interest. They also seek a bar against Stollaire to prohibit him from participating in digital securities offerings in the future.
Earlier this month the SEC launchеd a mock ICO in an effort increase consumer awareness of the typical warning signs of scam ICOs and promote investor education. The website for Howeycoins.com shows classic examples of a fraudulent ICO website, touting an “all too good to be true investment opportunity.” The website includes a nonspecific and hyperbolic white paper, guaranteed returns claims, celebrity endorsements, and a countdown clock.