SEC Charges Two Florida Executives In Relation To Fraudulent $30 Million Securities Offering
On August 6th, 2021, the Securities and Exchange Commission (SEC) officially announced securities fraud charges against two Florida executives and a company based in the Cayman Islands. Federal regulators filed charges against Gregory Keough, Derek Acree, and Blockchain Credit Partners. Below, our Miami investment fraud lawyers discuss the allegations raised in the SEC’s complaint.
Securities Fraud Charges: Gregory Keough, Derek Acree, and Blockchain Credit Partners
Background
From early 2020 to early 2021, Gregory Keough and Derek Acree operated a company called Blockchain Credit Partners. Both Mr. Keough and Mr. Acree are residents of Florida. Through their firm Blockchain Credit Partners, they raised money for an investment entity called DeFi Money
Market—seeking funds for supposed “decentralized finance” technology. In total, the SEC notes that the two Florida men sold approximately $30 million in unregistered securities. The securities in question were two types of “ digital tokens”: mTokens and DMG Tokens. These digital assets were marketed to investors as being tied directly to real world financial assets.
Understanding the Allegations
According to representations made to investors, the tokens in questions were digital assets. The funds secured from investors were then being used to purchase real world financial assets, including things like auto loans. Investors were promised a stable interest rate of 6.25%—well above the amount that could be earned in other supposedly “low risk” investments. Indeed, these so-called decentralized financial products were being marketed to investors as low risk.
However, the SEC contends that Mr. Keough, Mr. Acree, and their company Blockchain Credit Partners could not deliver on the representations made to investors. Federal regulators allege that two men recognized that price volatility rendered their plan inoperable relatively soon after they started raising capital. Yet, instead of informing investors, they made material misrepresentations, including false claims that they acquired certain automobile loans. In reality, the SEC order states that investment money siphoned off to cover personal expenses was being shuffled around to keep the scheme afloat.
Respondents Consent to SEC Findings and Penalties
Without admitting or denying any of the specific allegations raised by the SEC, both Mr. Keough and Mr. Acree consented to the agency’s findings and proposed sanctions. First, the SEC has put a cease-and-desist order in place—thereby compelling the Florida executives to stop raising money from investors. Further, the SEC has ordered disgorgement of all ill-gotten gains. The pair will pay more than $12.8 million in disgorgement to refund affected investors. Additionally, the Florida executives have consented to a $125,000 civil financial penalty.
Consult With a Securities Fraud Lawyer in South Florida Today
At Carlson & Associates, P.A., our Miami, FL investment fraud attorneys fight hard to protect the rights of investors. If you suffered financial losses as a result of a fraudulent securities offering, we are here to help to get justice. You may be able to recover compensation for your damages. Call our Miami law office right away to arrange a strictly confidential review and assessment of your legal case. We are ready to get started right away.
Resource:
sec.gov/news/press-release/2021-145