AriseBank execs fined $2.5m over ICO scam
Two former AriseBank executives behind an “allegedly fraudulent” initial coin offering (ICO) have been hit with a $2.5 million fine.
♫ They fought the law and the law won ♫
As reported in January, the US Securities and Exchange Commission (SEC) obtained a court order halting the ICO.
According to the SEC’s complaint, AriseBank used social media, a celebrity endorsement, and other “wide dissemination tactics” to raise what it claims to be $600 million of its $1 billion goal in just two months.
In the latest chapter, the SEC comments on AriseBank’s then-CEO Jared Rice Sr. and then-COO Stanley Ford, who were accused of offering and selling unregistered investments in their purported “AriseCoin” cryptocurrency.
“Rice and Ford lied to AriseBank’s investors by pitching the company as a first-of-its kind decentralised bank offering its own cryptocurrency for customer products and services,” says Shamoil T. Shipchandler, director of the SEC’s Fort Worth Regional Office. “The officer-and-director bar and digital securities offering bar will prevent Rice and Ford from engaging in another cryptoasset-based fraud.”
To settle the SEC’s charges, Rice and Ford agreed to be held jointly and severally liable for $2,259,543 in disgorgement plus $68,423 in prejudgment interest, and each must pay a $184,767 penalty.
They also agreed to lifetime bars from serving as officers and directors of public companies and participating in digital securities offerings, and permanent prohibitions against violating the antifraud and registration provisions of the federal securities laws.
Chief Judge Barbara M.G. Lynn of the US District Court for the Northern District of Texas ordered the sanctions on 11 December. Rice and Ford agreed to the settlements without admitting or denying the allegations in the SEC’s complaint.
On 28 November, the US Attorney’s Office for the Northern District of Texas announced parallel criminal charges against Rice.
As reported recently, the SEC doesn’t have time for any nonsense about ICOs or crypto woes.
It was not amused by the crypto antics of two celebrities; the saga of money transfer service WB21 came under scrutiny; and the SEC also settled charges against two companies that sold digital tokens in ICOs.
