On September 13, the SEC announcement charges against three media companies (respondents) for allegedly violating the Securities Act of 1933 (Securities Act) by making an illegal unregistered offer of shares and coins. In addition, two of the companies were also charged with allegedly making an unlawful unregistered offer of digital asset security. According to the SEC order, between April and June 2020, the respondents generally solicited thousands of people to invest in an offering of common shares. During the same period, two of the companies solicited individuals to invest in their digital asset coin security offering. As a result of these two unregistered securities offerings, the proceeds of which were commingled, the Respondents collectively raised approximately $ 487 million from over 5,000 investors.
The order finds that, through the offering of shares and coins, the respondents violated Sections 5 (a) and 5 (c) of the Securities Act by offering and selling the securities without having correctly recorded. The order, to which the companies consented without admitting or denying the findings, notes that the respondents are prohibited from participating in any digital asset security offering, and are required to cease and desist from any future violations of the Securities Act and help the SEC. personnel in the administration of a distribution plan, among others. Two of the companies agreed to pay, jointly and severally, a restitution of approximately $ 434 million plus pre-judgment interest of approximately $ 16 million, in addition to a civil fine of $ 15 million each. The other company agreed to pay a restitution of about $ 52 million plus pre-judgment interest of nearly $ 2 million, as well as a civil fine of $ 5 million. The ordinance also establishes a fair fund to return money to aggrieved investors.