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SEC Litigation Release: Charges Filed In Florida Pump-And-Dump Securities Fraud Scheme

On September 30th, 2022, the Securities and Exchange Commission (SEC) announced investment fraud charges against four individuals and two companies in a court in South Florida. Securities fraud charges were filed against the following parties:

  • Arbitrade Ltd (a company based in Bermuda);
  • Cryptobontix Inc. (a company based in Canada);
  • Troy R. J. Hogg of Canada:
  • Stephen L. Braverman of California;
  • Max W. Barber of Utah; and
  • James L. Goldberg of Miami, Florida.

The charges are centered around an alleged cryptocurrency-related pump-and-dump securities fraud scheme. Within this article, our Miami investment fraud lawyer discusses the pump-and-dump investment fraud allegations in more detail.

SEC Complaint: Pump-and-Dump Securities Fraud Charges 

The SEC filed a complaint against the named defendants in the United States District Court for the Southern District of Florida. According to the allegations raised by the federal agency, the misconduct occurred between the spring of 2018 and earlier 2019. During that time, the four charged individuals—Troy R. J. Hogg, Stephen L. Braverman, Max W. Barber, and James L. Goldberg—purportedly issued announcements that the Bermuda-based investment company  Arbitrade had obtained approximately $10 billion worth of gold. They stated that they would be selling cryptocurrency tokens that were fully backed by the gold.

The  cryptocurrency asset in question was called ‘Dignity’ or ‘DIG.’ The SEC alleges that the purported gold acquisition by Arbitrade was essentially a sham to boost the value of DIG. The SEC contends that the men sold nearly $37 million worth of the cryptocurrency to investors in Florida, throughout the United States, and around the world. The SEC also alleges that the men engaged in a pump-and-dump scheme. After “pumping” the cryptocurrency with false and misleading statements, they “dumped” their stake, thereby making a significant profit at the hands of unsuspecting investors.

SEC Seeks Comprehensive Sanctions and Penalties in Cryptocurrency Pump-and-Dump 

Federal regulators are seeking a wide range of sanctions and penalties against the two investment entities and the four named individuals. To start, the SEC is seeking findings of federal securities law violations, including violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The agency is also seeking the following penalties:

  • A permanent injunction;
  • Disgorgement against all defendants;
  • Payment of civil fines against all defendants; and
  • Officer/director bars for the individual defendants.

Notably, the SEC has also named an investment entity called SION Trading FZE as a relief defendant. Financial sanctions are also being pursued against this company. In securities fraud cases, a relief defendant is a defendant that is not accused of wrongdoing but is accused of holding funds/assets that were obtained through unlawful means.

 Consult With a Securities Fraud Attorney in South Florida

 At ​Carlson & Associates, P.A., our Miami securities losses attorneys have the skills and experience to represent investors affected by a pump-and-dump fraud scheme. If you or your loved one sustained significant financial losses, we can help. Contact our Miami law office today to set up a confidential, no commitment initial consultation.

Source:

sec.gov/litigation/litreleases/2022/lr25537.htm

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