On July 2, two men from Nevada agreed to settle a suit with US SEC for being accused of profiting from an illegal stock sale from UBI Blockchain Internet Ltd.
SEC filed a lawsuit on Monday in the New York federal court, accusing an attorney named T.J. Jesky and his firm’s manager, Mark F. DeStefano of illegally selling shares from UBI Blockchain Internet Ltd. and earing $1.4 million by this act from December 2017 to January 2018.
Formerly known as JA Energy, UBI Blockchain Internet Ltd., is a Hong Kong based company that is engaged in research and application of blockchain technology and development. Its primary focus is on the Internet of Things (IoT). According to Bloomberg, the company’s market capitalization is at $358 million.
The accused were able to obtain 72,000 restricted shares from the company in October, and they were permitted to sell it at a fixed price of $3.70 according to SEC. The problem was, these men overvalued the stocks selling them from 21.12 to 48.40, after the company’s stock railed. SEC reported “unusual and unexplained market activity” for the company’s shares in January after which the sale was suspended and expired on January 22.
Jesky and DeStefano did not confess or deny the accusation, but to settle the suit they agreed to reimburse the $1.4 million “profit” and on top of that pay the penalties of $188,682.
SEC has been on guard regarding fraudulent act within the crypto space, and in May the regulatory body launched a fake ICO website to increase awareness about the matter, and to educate investors regarding scams and all fraudulent transaction on cryptocurrencies.
In April SEC commissioner Robert Jackson said that the crypto space has been full of troubling development, especially in the ICO space, but this does not mean there will be more bans and regulations, but rather focus on protecting other investors who might be greatly affected by this.