SEC Settles with Uulala and Founders for Unregistered Digital Security Offering

The Securities and Exchange Commission (SEC) has announced charges alleging an unregistered securities offering in regards to digital assets by Uulala. The SEC simultaneously announced a settlement with the company along with its founders Oscar Garcia and Matthew Loughran.

According to the SEC, more than a thousand investors participated in an alleged unregistered offering of digital asset securities that raised more than $9 along with an alleged second fraudulent offering of convertible notes.

Filed in the United States District Court for the Central District of California, the SEC’s complaint alleges that, from December 2017 through January 2019, Uulala sold UULA tokens, which were allegedly to be used to record transactions in a financial application that Uulala was developing and promoting to those without access to traditional banking services.

According to complaint, Uulala, Garcia, and Loughran allegedly made materially false and misleading statements to investors throughout their offering of UULA about having “patent pending” technology that had been incorporated into their app and having a proprietary algorithm to assign credit scores to users of their app.

The complaint further alleges that Uulala and Garcia then made materially false and misleading statements about Uulala’s financial performance in the convertible notes offering. The SEC also alleges that Uulala did not register its offers and sales of UULA tokens with the Commission.

Without admitting or denying the allegations, Uulala, Garcia, and Loughran each consented to final judgments ordering injunctive relief and undertakings aimed at permanently disabling the UULA and UULA tokens and removing them from digital asset trading platforms, and the payment of civil penalties in the amount of $300,000 as to Uulala, $192,768 as to Garcia, and $50,000 as to Loughran.

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