(HedgeCo.Net) The Securities and Exchange Commission announced fraud charges against a Brooklyn individual and two entities under his control who allegedly engaged in a fraudulent scheme to sell digital securities to investors and to manipulate the market for those securities. On Aug. 12, 2019, the court entered an emergency freeze to preserve at least $8 million of the $14.8 million the defendants raised in 2017 and 2018 in an offering of digital securities.<\/p>\n
The SEC filed charges against Reginald \u201cReggie\u201d Middleton, a self-described \u201cfinancial guru,\u201d and two entities he controls, Veritaseum, Inc. and Veritaseum, LLC (collectively Veritaseum). The Commission\u2019s complaint, filed in federal court in Brooklyn, New York, alleges that the Defendants marketed and sold securities called \u201cVERI\u201d tokens on the internet, inducing retail investors to invest based on multiple material misrepresentations and omissions. Among other things, Defendants allegedly knowingly misled investors about their prior business venture and the use of offering proceeds, touted oversized \u2013 but fictitious \u2013 investor demand for VERI, and claimed to have a product ready to generate revenue when no such product existed. The complaint further alleges that Middleton manipulated the price of the VERI tokens trading on an unregistered digital asset platform. The complaint also alleges that Middleton recently moved a significant amount of investor assets and then dissipated a portion of those assets, transferring them to Middleton\u2019s personal account.<\/p>\n
\u201cAfter learning about Middleton\u2019s transfer of funds, we took quick action to prevent the further dissipation of investor assets,\u201d said Marc P. Berger, Director of the SEC\u2019s New York Regional Office. \u201cWhether in digital currency or plain cash, we will act to protect investor assets and to pursue fraud and manipulation in our securities markets.\u201d<\/p>\n
The SEC\u2019s complaint charges Middleton and Veritaseum with violating the registration and antifraud provisions of the U.S. federal securities laws, and Middleton with additionally violating the antifraud provisions on the basis of his manipulative trading. The complaint seeks permanent injunctions, disgorgement plus interest and penalties, and a bar from offering digital securities. For Middleton, the SEC also seeks an officer-and-director bar.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission announced fraud charges against a Brooklyn individual and two entities under his control who allegedly engaged in a fraudulent scheme to sell digital securities to investors and to manipulate the market for those securities. […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-70525","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/70525","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=70525"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/70525\/revisions"}],"predecessor-version":[{"id":70526,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/70525\/revisions\/70526"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=70525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=70525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=70525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}