The long saga of Kik Interactive’s battle with the Securities and Exchange Commission appears to finally be at an end. A document filed in US District Court today indicates that both sides have come to an agreement on a settlement with a $5 million penalty. On September 30, 2020, Judge Alvin K. Hellerstein ruled against Kik and in favor of the SEC, indicating an end to a years-long legal fight.
To quote the document:
“The parties, plaintiff United States Securities and Exchange Commission (“SEC”) and defendant Kik Interactive Inc. (“Kik”), respectfully respond as follows to your Opinion and Order On Motions For Summary Judgment, issued September 30, 2020 (ECF No. 88), which instructs, in relevant part, that “[b]y October 20, 2020, the parties shall jointly submit a proposed judgment for injunctive and monetary relief.”
The parties have reached agreement on a proposed judgment, and file herewith a Consent executed by Kik Interactive Inc. (Exhibit A) and a proposed Final Judgment (Exhibit B). The proposed Final Judgment, if approved by the Court, would permanently enjoin Kik from committing future violations of Section 5, pursuant to Section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b); impose a conduct-based injunction, as set forth in the proposed Final Judgment, under Section 21(d)(5) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u(d)(5); and require Kik to pay a penalty of $5 million, pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d). The proposed Final Judgment would conclude this action.”
In 2017, Kik, a Canada-based company, raised over $100 million in a token offering that was deemed to have transgressed US securities laws. Instead of immediately seeking a settlement regarding the civil case, Kik decided to argue the case in court. The decision may have cost Kik considerably more money and certainly quite a bit of time.