Defendants Charged in Fraudulent ICO to Pay Nearly $7 Million
Litigation Release No. 24635 / October 2, 2019
Securities and Exchange Commission v. PlexCorps, Dominic Lacroix, and Sabrina Paradis-Royer, No. 1:17-cv-07007-CBA-RML (E.D.N.Y.)
The Securities and Exchange Commission announced that it has obtained a final judgment against the proprietors of the PlexCoin Initial Coin Offering (ICO), who consented to a judgment enjoining them from future violations of the antifraud provisions of the federal securities laws and ordering them to pay nearly $7 million.
According to the SEC's complaint, filed Dec. 1, 2017, PlexCorps, and its proprietors Dominic Lacroix and Sabrina Paradis-Royer, fraudulently raised millions of dollars in virtual and fiat currency from the unregistered sales of securities called PlexCoin based on a series of false and misleading statements to potential and actual investors, including misrepresentations about the size and scale of PlexCorps' operations, the use of funds raised in the PlexCoin ICO, and the amount of funds raised in the PlexCoin ICO.
On October 2, 2019, the U.S. District Court for the Eastern District of New York, entered a final judgment against PlexCorps, Lacroix, and Paradis-Royer. Pursuant to the final judgment, the Defendants, without admitting or denying the allegations in the SEC's complaint, are enjoined from further violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule l0b-5 thereunder, and Lacroix and Paradis-Royer are additionally enjoined from participating in any digital-securities offerings. All Defendants are ordered to disgorge, on a joint and several basis, $4,563,468 in ill-gotten gains from the PlexCoin ICO plus $348,145 in prejudgment interest, and Lacroix and Paradis-Royer are ordered to each pay a $1,000,000 civil penalty. Lacroix also is permanently barred from serving as an officer or director of a publicly traded entity.
The final judgment requires the Defendants to forego their rights to the entirety of the investor funds seized by a receiver appointed by the Superior Court of Quebec, totaling approximately $4 million, as well as $800,000 in investor funds held by U.S.-based entities that were subject to an asset freeze issued by the District Court. At this time, the Commission anticipates coordinating any distribution to harmed investors with the Autorité des marchés financiers of Quebec.
The litigation was conducted by Jorge G. Tenreiro of the New York Regional Office and David H. Tutor and John O. Enright of the Cyber Unit, and assisted by Marlee B. Miller and Owen A Granke in the agency's Office of International Affairs and Elzbieta Wraga, a staff accountant in the New York Regional Office. The case is being supervised by Sanjay Wadhwa, Senior Associate Director of the SEC's New York Regional Office. The SEC appreciates the cooperation and assistance of the Autorité des marchés financiers of Quebec, the Ontario Securities Commission, the Hong Kong Securities and Futures Commission, the French Autorité des marchés financiers, the Financial Services Agency of Japan, the United Kingdom Financial Conduct Authority, the British Columbia Securities Commission, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN), the Gibraltar Financial Services Commission, and the Monetary Authority of Singapore.