The US Securities Exchange Commission (SEC) filed a lawsuit against Veritaseum, LLC, and Veritaseum, Inc. and Reginald Middleton. The SEC claimed that the ICO conducted by the company, which raised $14.8 million was illegal. This is because there was no registration statement filed for the offers and sales of VERI tokens.
SEC in its complaint, had alleged that the company misled its investors about their prior business venture and the use of the offering. Reggie moved $2 million of the proceeds to blockchain addresses his company didn’t control after the SEC told him in July that an enforcement action was coming, the agency said.
Middleton and his companies allegedly “touted outsized—but fictitious—investor demand for” their digital tokens. Middleton, who began blogging about publicly-traded companies in 2007 and “claims to have foreseen the financial crisis and the collapse of Bear Stearns and Lehman Brothers,” is the sole owner of Veritaseum Inc. and Veritaseum LLC, the SEC said.
The companies and Middleton claimed to have a product worth millions of dollars ready “when no such product existed,” according to the SEC. The product would allegedly “replace brokers, banks, and hedge funds.”
According to the court’s order, Middleton is prohibited from acting as an officer or director of any issuer that has a class of securities registered under Section 12 of the Exchange Act. The defendants are also prohibited from engaging in any offering of digital securities. The company issued VERI tokens in an ICO that took place from April 25, 2017, to May 26, 2017.
Since October 9, Veritaseum (VERI) has declined from $24 to $15 per coin at press time, according to Coin360.