Last week we reported that the US SEC stopped a fraudulent ICO that falsely claimed that it had SEC approval. Yesterday, the SEC suspended trading in the securities of a company amid questions surrounding its statements about partnering with a claimed SEC-qualified custodian for use with cryptocurrency transactions and a purportedly registered public offering of preferred stock.
The SEC’s trading suspension order says that two August 2018 press releases issued by Nevada-based American Retail Group, Inc., aka Simex, Inc., claimed that the company had partnered with an SEC qualified custodian for use with cryptocurrency transactions that would be “under SEC Regulations,” and that the company was conducting a token offering that was “officially registered in accordance [with] SEC requirements.”
The Chief of the SEC Enforcement Division’s Cyber Unit reminded the public that “the SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering.”
Under the federal securities laws, the SEC can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.
