US Crypto Firm Under SEC Investigations For Invalid Claims
A suspension has been issued by the US SEC regarding securities trading of an American Retail Group company based in Nevada. It will last for a period of 10 days from October 22.
In consensus with rules applied by SEC, the fact that the stock quotes of the firm are issued through OTC Link, automatic activation will not continue after the suspension period. OTC markets work by using dealer networks in which broker-dealers are the only entity that is allowed to quote or aid stocks through OTC. Following a suspension, if this type of network is implemented, it is crucial that the assigned broker makes sure that the firm’s financial testimonies are fairly up-to-date/precise in regards to all related issues, particularly in regards to those that have been brought to attention by the applied suspension from SEC. This has to be done ahead of the republishing of any stock quotes.
The violation came after it was alleged in more than one press statement that they had a curator who is officially SEC-qualified and also that their ICO was in compliance with SEC security guidelines.
Investors Being Warned by the SEC
The initial press statement was released on August 16 and informed investors about Prime Trust working with the firm, granting them an official certified SEC curator and also escrow. Furthermore, the SEC’s cyber department chief, Robert A. Cohen, commented on the issue within that same press statement. He said that they do not endorse any curators or even qualify any for cryptos; he warned investors to be alert to the matter when contemplating an ICO investment. An official alert for consumers was just announced last week concerning such false claims about endorsements from the SEC.
The press statement that followed, whose aim was announcing the ICO, was released on August 22. The violation was a clear statement about how their ICO had an official registration compliant with SEC rules. Moreover, ICO rules from SEC have been proposed; however, they haven't yet been ratified into law.
This is not the first time the SEC has been dealing with business companies providing similar misleading statements. Last September, it was announced that they were investigating CAM for also claiming to meet official regulations of the SEC. Another investigation was also launched for startup crypto company Blockvest for falsely claiming compliance with SEC rules as well using the official logo of the SEC illegally in order to lend credibility to their claims.