SEC in Settlement Discussion Worth Nearly $15 Million with Veritaseum (VERI) ICO Organizer

The U.S. Securities and Exchange Commission is in discussions with the alleged fraudulent firm Virataseum. Sec announced off into a dialogue with CEO Reginald Middleton before the pre-trial conference for a possible settlement of the $15 million illegal token sales.

Allegations

The complaint states that VERI tokens were not securities, and they mislead all investors about the potential value. The company is accused of misappropriating investors’ money for personal use. The company also has hackers who stole approximately $8 million raised during the ICO.

The defendant's disagreed with the allegations claiming the SEC has not demonstrated if  investors expected a profit, as a requirement aimed to settle the prolong of Howey. He states that security gets classified as an investment depending on value, risks involved, and whether it is tradable. The tokens don’t represent any ownership interest on Veritaseum or its assets, doesn’t offer voting rights, pay dividends, or offer rights to share the company’s profits according to Middleton’s legal team.

Scheduled Pre-trial Conference

The parties have requested a court hearing on November 11th, 2019, to permit them to devote all available resources to the case settlement. It is a ruling by Magistrate Judge Ramon E. Reyes.

Expected Outcome

During the settlement, the defendant is presumed to pay US$7M, which is interest, civil penalty, and disgorgement compensation. The company’s assets will be frozen inside and outside the country and combined for a fair distribution among the affected investors.

SEC Settlements

PlexCoin’s principals are expected to pay US$4,563,469.

Both parties are not to participate in offering digital securities, and the director gets permanently barred from directing any public company.

Frozen assets turned to the SEC for application against penalties.

Fair compensation for investors is being applied. Regulators are taking relevant actions against ICOs which don’t comply with security regulations to prevent the occurrence of such case in the future.