SEC Charges Financial Technology Company with Unregistered Offering
Sept. 27, 2019
File No. 3-19544
September 27, 2019 - The Securities and Exchange Commission today announced the institution of settled cease and desist proceedings against iQuantifi, Inc., a Tennessee-based financial technology company, and Thomas F. White, its president and chief executive officer, for selling unregistered iQuantifi securities to investors that they knew or should have known were ineligible to purchase shares in the offering.
The SEC's order finds that between October 29, 2013 and January 19, 2019, iQuantifi and White raised $3,455,000 from over 50 investors through the continuous offering and sale of unsecured promissory notes that were convertible to equity in iQuantifi. The order finds that the investors, who included retirees and widows, did not qualify as accredited investors at the time of their investments in iQuantifi. The order further finds that iQuantifi and White sought investors through general solicitation activities.
The SEC's order finds that iQuantifi and White violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, orders iQuantifi and White to cease and desist from committing or causing any violations and any future violations of those provisions, and orders White to pay a $25,000 civil penalty. iQuantifi has agreed to notify investors of the order and their right to rescission under Section 12(a) of the Securities Act, waive the statute of limitations defense for Section 12(a) claims asserted within one year of the notice to investors, and limit the amount it will pay to White and his family members in the future. White has agreed to forgive a portion of the outstanding balance on loans he previously made to iQuantifi. iQuantifi and White agreed to settle the charges without admitting or denying the findings in the SEC's order.
The SEC's investigation was conducted by Thomas Bosch and supervised by Justin Jeffries of the SEC's Atlanta Regional Office. The SEC examination that led to the investigation was conducted by Deborah Shaw, Todd Rogers, and Dale Perez.