The SEC says in a release that it has obtained an emergency asset freeze to halt an initial coin offering fraud that raised up to US$15 million from thousands of investors since August. The offering falsely promised a 1,354% profit, says the SEC.
The commission has filed charges against “a recidivist Quebec securities law violator,” Dominic Lacroix, and his company, PlexCorps, says the release. The charges are the result of regulatory collaboration with the Autorité Des Marchés Financiers (AMF).
In July 2017, at the request of the AMF, the Financial Markets Administrative Tribunal had issued orders against Lacroix and PlexCorps, PlexCoin, DL Innov Inc. and Gestio Inc. in connection with their activities relating to an investment in the purchase of PlexCoin, a virtual currency.
The SEC complaint alleges Lacroix and PlexCorps marketed and sold securities called PlexCoin online to investors in the U.S. and elsewhere, promising the 13-fold profit.
The SEC also charged Lacroix’s partner, Sabrina Paradis-Royer, in connection with the scheme.
The charges are the first by the SEC’s new cyber unit.
“This first cyber unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing,” said Robert Cohen, cyber unit chief, in the release.
The SEC’s complaint charges Lacroix, Paradis-Royer and PlexCorps with violating the anti-fraud provisions, and Lacroix and PlexCorps with violating the registration provision, of the U.S. federal securities laws.
The complaint seeks permanent injunctions, disgorgement plus interest and penalties. For Lacroix, the SEC also seeks an officer-and-director ban and, for both Lacroix and Paradis-Royer, a ban from offering digital securities.
A June 2017 AMF release reveals the Financial Markets Administrative Tribunal issued orders against Lacroix, as well as Régis Roberge, DL Innov Inc., Micro-Prêts Inc. and Gap Transit Inc., in connection with failures to comply with the Securities Act.
Also, Lacroix appears on CSA’s disciplined list for “illegal or unregistered distributions,” for which he was fined $12,000 on Feb. 28, 2013. Lacroix was further fined $25,000 by the Court of Quebec for illegal distribution, illegal practice and misrepresentations.