Crystal World Holdings, Inc.; The New Sports Economy Institute; and Christopher Rabalais
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26244 / February 10, 2025
Securities and Exchange Commission v. Crystal World Holdings, Inc., et al., No. 1:19-cv-02490 (CJN) (D.D.C. filed Aug. 19, 2019)
SEC Obtains Final Judgment Against Issuer For The Unregistered Offer And Sale of Securities In An Alleged “Gift-Donation” Scheme
On January 28, 2025, the Securities and Exchange Commission obtained a final judgment against Crystal World Holdings, Inc., The New Sports Economy Institute, and their former principal, Christopher Rabalais, of Forest Hill, Louisiana, who were previously charged with the unregistered offer and sale of securities and operating a fraudulent “gift-donation” scheme.
The Commission’s complaint, filed in the United States District Court for the District of Columbia on August 19, 2019, alleged that Rabalais solicited funds from investors that he described as “donations” to New Sports, a non-profit entity he controlled, in return for which investors received “gifts” of Crystal World stock. The complaint further alleged that Rabalais would then tout that the Crystal World stock was about to registered with the Commission, stressing in email solicitations and website posts the importance of buying the stock before registration made it valuable. Yet, according to the complaint, no steps were taken to register the stock and, for much of the fundraising period, Rabalais and the companies did not understand how such registration was achieved.
Rabalais and the companies previously consented to entry of a partial judgment, without admitting or denying the allegations in the complaint, permanently enjoining them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, and the registration requirements of Section 5 of the Securities Act; and further permanently enjoining them from participating in the unregistered issuance, purchase, offer, or sale of any security.
On January 28, 2025, the Court entered a final judgment ordering Rabalais and the companies to pay, jointly and severally, $1,468,556 in disgorgement of ill-gotten gains and prejudgment interest. The Court also ordered Rabalais to pay a civil penalty of $223,229, and Crystal World and New Sports to each pay civil penalties of $100,000.
The SEC’s investigation was conducted by Michael Flanagan and supervised by Ivonia Slade. The litigation was conducted by Patrick Costello and supervised by David Nasse.
The SEC’s Office of Investor Education and Advocacy has issued investor alerts on the red flags of investment fraud. Additional information is available on Investor.gov.