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DISCERNING DATA

A Faegre Drinker Blog Covering the Latest in Privacy, Cybersecurity and Data Strategy

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SEC Freezes $27 Million Related to a Blockchain/Cryptocurrency Acquisition

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The Securities and Exchange Commission (SEC) obtained a court order freezing more than $27 million in proceeds from alleged illegal distributions and sales of restricted shares of a public company , and charged the company, its CEO, and three other affiliated individuals on April 6, 2018. That same day, the Nasdaq Stock Market  halted trading in the company’s stock.

The SEC’s complaint alleges that shortly after the company began trading on the Nasdaq Stock Market and announced the acquisition of a purported blockchain-empowered cryptocurrency business,  its stock price rose dramatically until its market capitalization exceeded $3 billion. The SEC further alleges that the CEO and the three other individual defendants then illegally sold large blocks of their restricted shares to the public while the stock price was excessively elevated and that they collectively reaped more than $27 million in profits.

This action serves as yet another example of the SEC’s heightened and aggressive focus in this area. To learn more about this enforcement action, read my full blog post on Drinker Biddle’s SECurities Law Perspectives blog.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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April 12, 2018
Written by: Discerning Data Editorial Board
Category: Financial Services, SEC
Tags: Blockchain, cryptocurrency, enforcement, public company, registration

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