SEC Charges Former State Senator Over Digital Asset Scam

The US SEC has charged former state senator David Schmidt for an unregistered security offering that promised abnormally high returns. The lawsuit alleges that the defendants raised more than $ 4.3 million from over 150 investors in the US and elsewhere.

23 March, 2020 | AtoZ Markets – The US Securities and Exchange Commission (SEC) obtained an asset freeze order and other emergency measures against Meta 1 Coin. It is a cryptocurrency project promoted by a state senator. The SEC charges former Washington state senator David Schmidt, and two others for their role in promoting the sale of “Meta 1 Coins”.

SEC Halts Meta 1 Coin Scam

According to the SEC complaint, the defendants sold and marketed the digital asset “Meta 1 Coin” via the “Meta 1 Coin Trust.” It made unregistered security offering for the asset.

The SEC said defendants had made “many false and misleading statements.” It included that the Meta 1 coin was supported by an art collection valued at $ 1 billion, or a gold deposit valued at $ 2 billion. An accounting firm regularly audited it.

The complaint accuses Robert Dunlap and Nicole Bowdler, as well as Schmidt, of violating anti-fraud and securities regulations by promising investors returns of nearly 225,000%. They also claimed that the coin was safe and would never lose its value. However, investors never received their coins. Their funds used to pay the defendants’ personal expenses and to provide funds to Peter K. Shamoun and Pramana Capital Inc.

Read More: Google Searches for “Buy Bitcoin” Spikes as BTC Falls Below $7000

$4.3 Million Securities Fraud

In total, Meta 1 Coin raised $ 4.3 million from approximately 150 investors, including some based in the US. The complaint filed on March 16 in the West District of Texas (Austin Division). It unsealed at Mach 20. The SEC also claims that the defendants used the investors’ money to finance lavish lifestyles. It included the purchase of a $ 215,000 Ferrari.

It also marks Shamoun and Pramana as defendants in this case. The SEC seeks permanent injunctions against the principal defendants, in addition to civil sanctions. It also seeks to obtain the disgorgement of ill-gotten gains as well as pre-judgment interest from all defendants.

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