The Securities and Exchange Commission (SEC) declared its decision to take action against Seattle-based Coinme, and the Chief Executive Officer of both entities, Neil Bergquist.
SEC announced resolutions today against Coinme Inc., its subsidiary Up, Global SEZC, and the Chief Executive Officer of both entities, Neil Bergquist, for illegally providing unregistered investments in the form of crypto asset “UpToken.”
Additionally, the SEC accused Bergquist and Up Global of making false and misleading statements concerning the demand for UpToken and the amount generated through the offering.
From October 16th, 2017 to December 15th, 2017, Coinme, Up Global, and Bergquist conducted unapproved sales and offers of crypto asset securities, during which they actively promoted the financial gain that UpToken investors would experience when Coinme got UpToken from the secondary market after the ICO.
The ruling also reveals that without the knowledge of those who invested in UpToken, Bergquist and Up Global had taken steps prior to and during the ICO to acquire a significant number of UpToken that would significantly diminish Coinme’s need to purchase more of these tokens after the ICO had ended. Furthermore, they are accused of deliberately or recklessly exaggerating the amount raised in the ICO.
SEC Findings Regarding Coinme, Up Global, and Bergquist
The SEC’s ruling determined that Coinme, Up Global, and Bergquist violated Sections 5(a) and 5(c) of the Securities Act of 1933, and that Bergquist and Up Global additionally violated Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
Coinme, Up Global and Bergquist consented to the SEC’s conclusions without admitting or refuting them. And promised to stop future infringements of the relevant rules and obey certain obligations. Up Global consented to pay a fine of $3,520,000, of which Coinme is jointly and severally responsible. Coinme consented to a separate penalty of $250,000; and Bergquist accepted to pay a penalty of $150,000.
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