SEC Requests Court’s Action Against Alleged Cherubim SJTCoin Pump And Dump ICO Scandal
SEC Requests Court's Action Against Alleged Cherubim SJTCoin Pump And Dump ICO Scandal
In the recent months, the US Securities and Exchange Commission has significantly tightened the noose around ICOs. Now, they have asked a district court to enforce a subpoena as part of a probe into alleged pump-and-dump tactics that involved claims of a $100 million initial coin offering (ICO).
This Tuesday, they issued a statement saying officials are investigating Saint James Holding and Investment Company Trust and its trustee, Jeffrey James, months after the agency first moved to suspend trading in penny-stock company Cherubim Interests, Inc.
The agency thinks Cherubim misrepresented investors about its claims about the so-called SJTCoin, which it said in January was intended for cooperative living, working and healthier lives and offers extensible diversity in the use of the coin over current coins like Bitcoins for both financial and societal gain.
Because of the SEC's concerns regarding the accuracy of Cherubim's disclosures, it had suspended trading in the securities of Cherubim and other microcap issuers on February 15, 2018, for ten business days. Based on its ongoing, nonpublic investigation, the SEC has reason to believe that to “pump” its stock price, Cherubim issued false public statements in January 2018 claiming that the company had executed a $100,000,000 financing commitment to launch an initial coin offering (“ICO”) for St. James Trust. After Cherubim's stock price and trading volume increased on this news, certain individuals associated with the company may have “dumped” their overvalued Cherubim stock for significant profits.
Yet to date, James and the St. James Trust has yet to respond to the subpoena, despite “personally [serving] James with copies of the subpoenas.”
The agency is exerting pressure on many of those companies to settle their cases. In response, dozens of companies have quietly agreed to refund investor money and pay a fine. But many startups that have been subpoenaed say they are left in the dark struggling to satisfy the SEC’s demands and are uncertain of how others are handling it,