The Securities and Exchange Commission has obtained an emergency asset freeze to halt an Initial Coin Offering (ICO) scam that reportedly raised up to $15 million from thousands of investors since August. Dominic Lacroix, and his company, PlexCorps, had launched the PlexCoin ICO and falsely promised a 13-fold profit in less than a month, according to the SEC. The PlexCoin ICO had previously been held in contempt of court in Quebec as the provincial regulators had pursued the alleged fraud. The SEC acknowledged the assistance of Quebec’s Autorité Des Marchés Financiers.
Lacroix was described as a recidivist scammer by the SEC. In February 2013, Lacroix and his then company Micro-Prêts pleaded guilty before the Court of Quebec to six charges of illegal distribution, illegal practice and misrepresentations. PlexCoin was promoting the PlexCoin as recently as December 1st.
The Quebec-based securities law violator was hit by the SEC’s complaint, filed in federal court in Brooklyn, New York. The law suit alleges that Lacroix and PlexCorps marketed and sold securities called PlexCoin on the internet to investors in the U.S. and elsewhere, claiming that investments in PlexCoin would yield a 1,354 percent profit in less than 29 days. The SEC also charged Lacroix’s partner, Sabrina Paradis-Royer, in connection with the scheme.
The SEC states that today’s charges are the first filed by the SEC’s new Cyber Unit. The unit was created in September to focus the Enforcement Division’s cyber-related expertise on misconduct involving distributed ledger technology and initial coin offerings, the spread of false information through electronic and social media, hacking and threats to trading platforms.
“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing,” said Robert Cohen, Chief of the Cyber Unit. “We acted quickly to protect retail investors from this initial coin offering’s false promises.”
Based on its filing, the SEC obtained an emergency court order to freeze the assets of PlexCorps, Lacroix, and Paradis-Royer.
The SEC’s complaint charges Lacroix, Paradis-Royer and PlexCorps with violating the anti-fraud provisions, and Lacroix and PlexCorps with violating the registration provision, of the U.S. federal securities laws. The complaint seeks permanent injunctions, disgorgement plus interest and penalties. For Lacroix, the SEC also seeks an officer-and-director bar and a bar from offering digital securities against Lacroix and Paradis-Royer.
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