Charges of forging documents and official seals are among the reasons that stood behind SEC’s decision, after having issued similar ones and warnings to other companies and investors in a similar context.
October- 23, 2018 | AtoZ Markets
The Securities Exchange Commission (SEC) has suspended trading in the securities of American Retail Group, Inc (OTC: ARBG) against the background of charges of ARBG making false statements referring to cryptocurrency, one of which claiming to have partnered with an “SEC-qualified custodian.”
“The Securities and Exchange Commission today suspended trading in the securities of a company amid questions surrounding its statements about partnering with a claimed SEC-qualified custodian for use with cryptocurrency transactions and a purportedly registered public offering of preferred stock.”, said SEC in a press release yesterday.
In his turn, Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, stressed saying: “The SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering,”.
Within its mandate, the SEC could suspend trading in a stock “for 10 days and, generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.” As published on SEC’s website.
Other Fraud Incidents Were Cited
The SEC and Commodity Futures Trading Commission (CFTC) had earlier expressed concerns with regard to more companies making false claims that they are registered with the aforementioned regulatory bodies.
The media reported as well that both the SEC and CFTC issued recently an investor an alert, warning about using their seal.
In a similar context, the CFTC earlier this month filed charges at the U.S. District Court for the Northern District of Texas, against two men for forging documents in a fraudulent attempt to impersonate regulators.
It is worth mentioning that the cryptocurrency sector has recently witnessed many fraudulent cases of forging seals of official regulatory bodies, and system hacking incidents, which add to the other issues digital assets are said to suffer from like volatility.