Skip to main content

Cyber Enforcement Actions

June 20, 2017

Cybersecurity graphic

Digital Assets/Initial Coin Offerings

Action Name Description Date Filed

GTV Media Group, Inc., et al.

The Securities and Exchange Commission charged New York City-based GTV Media Group Inc. and Saraca Media Group Inc., and Phoenix, Arizona-based Voice of Guo Media Inc., with conducting an illegal unregistered offering of GTV common stock. The SEC also announced charges against GTV and Saraca for conducting an illegal unregistered offering of a digital asset security referred to as either G-Coins or G-Dollars. The respondents have agreed to pay more than $539 million to settle the SEC's action.

9/13/2021

SEC v. Rivetz Corp., et al. The Securities and Exchange Commission charged Rivetz Corp., Rivetz International SEZC, and Steven K. Sprague, the President of Rivetz and CEO of Rivetz International, with conducting an illegal, unregistered offering of securities through an initial coin offering. 9/8/2021

SEC v. BitConnect, et al.

SEC v. Brown, et al.

The Securities and Exchange Commission filed an action against BitConnect, an online crypto lending platform, its founder Satish Kumbhani, and its top U.S. promoter and his affiliated company, alleging that they defrauded retail investors out of $2 billion through a global fraudulent and unregistered offering of investments into a program involving digital assets.  The Commission previously charged five other individuals in a related action for promoting the BitConnect offering.

9/1/2021

5/28/2021

Poloniex, LLC The Securities and Exchange Commission filed settled charges against Poloniex, LLC, under which Poloniex agreed to pay more than $10 million for operating an unregistered online digital asset exchange in connection with its operation of a trading platform that facilitated buying and selling of digital asset securities. 8/9/2021
Blockchain Credit Partners d/b/a DeFi Money Market, et al. The Securities and Exchange Commission charged two Florida men and their Cayman Islands company for unregistered sales of more than $30 million of securities using smart contracts and so-called “decentralized finance” (DeFi) technology, and for misleading investors concerning the operations and profitability of their business DeFi Money Market. 8/6/2021
SEC v. Uulala, Inc., et al. The Securities and Exchange Commission filed settled charges against Uulala, Inc., and two of its California-based founders, Oscar Garcia and Matthew Loughran for allegedly defrauding more than a thousand investors in an unregistered offering of digital asset securities that raised more than $9 million and against Uulala and Garcia for allegedly engaging in a second fraudulent offering of convertible notes. 8/4/2021
Blotics Ltd., f/d/b/a Coinschedule Ltd. The Securities and Exchange Commission filed settled charges against the operator of Coinschedule.com, a once-popular website that profiled offerings of digital asset securities.  The SEC’s order finds that United Kingdom-based Blotics Ltd. violated the anti-touting provisions of the federal securities laws by failing to disclose the compensation it received from issuers of the digital asset securities it profiled. 7/14/2021
Loci, Inc., et al. The Securities and Exchange Commission filed settled charges against Loci, Inc. and its CEO John Wise for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities.  According to the SEC's order, Loci provided an intellectual property search service for inventors and other users through its software platform called InnVenn.  The SEC's order finds that from August 2017 through January 2018, Loci and Wise raised $7.6 million from investors by offering and selling digital tokens called "LOCIcoin."  As stated in the order, in promoting the ICO, Loci and Wise made numerous materially false statements to investors and potential investors, including false statements concerning the company's revenues, number of employees, and InnVenn's user base. 6/22/2021

SEC v. Hamid, et al.

SEC v. Manor, et al.

The Securities and Exchange Commission charged three individuals for their roles in the $30 million initial coin offering fraud that was spearheaded by convicted criminal Boaz Manor and his associate, Edith Pardo. The SEC previously charged Manor, Pardo, and their companies, CG Blockchain, Inc. and BCT Inc. SEZC in connection with the scheme in January 2020.

6/15/2021

1/17/2020

SEC v. Radjabli, et al. The Securities and Exchange Commission filed charges against Edgar M. Radjabli of Boca Raton, Florida, and two entities he controlled for engaging in several securities frauds of escalating size.  The SEC's complaint alleges that Radjabli, formerly a practicing dentist, and Apis Capital Management LLC, an unregistered investment adviser firm Radjabli owned and controlled, conducted a fraudulent offering of Apis Tokens, a digital asset representing tokenized interests in Apis Capital's main investment fund.  The complaint further alleges that Radjabli and Apis Capital manipulated the securities market for Veritone Inc., a publicly-traded artificial intelligence company, by announcing in December 2018 an unsolicited cash tender offer to purchase Veritone for $200 million, when, in truth Radjabli and Apis Capital lacked the financing or any reasonable prospect of obtaining the financing necessary to complete the deal. 6/11/2021
SEC v. LBRY, Inc. The Securities and Exchange Commission charged LBRY, Inc., a blockchain company, with conducting an unregistered offering of digital asset securities. According to the SEC's complaint, from at least July 2016 to February 2021, LBRY, which offers a video sharing application, sold digital asset securities called "LBRY Credits" to numerous investors, including investors based in the US. LBRY allegedly received more than $11 million in U.S. dollars, Bitcoin, and services from purchasers who participated in its offering. 3/29/2021
SEC v. Cutting The Securities and Exchange Commission filed an emergency action and obtained a temporary restraining order and asset freeze against Shawn C. Cutting of Sandpoint, Idaho, for allegedly raising millions of dollars from hundreds of investors by falsely claiming to be a financial adviser with securities licenses, overstating investment returns, and misappropriating money received from investors. 3/5/2021
SEC v. Coinseed, Inc., et al. The Securities and Exchange Commission charged Coinseed, Inc., a company that purported to offer a mobile investment application that enabled users to invest in digital assets, and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu, in connection with Coinseed's offer and sale of digital asset securities. 2/17/2021
SEC v. Krstic, et al. The Securities and Exchange Commission charged three individuals with defrauding hundreds of retail investors out of more than $11 million through two fraudulent and unregistered digital asset securities offerings. 2/1/2021
Wireline, Inc. The Securities and Exchange Commission filed a settled cease-and-desist proceeding against financial technology company Wireline, Inc. for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities. 1/15/2021
Tierion, Inc. The Securities and Exchange Commission filed a settled cease-and-desist proceeding against Texas-based blockchain startup company Tierion, Inc. for conducting an unregistered offering of securities in the form of a "token sale." Tierion has agreed to return funds to harmed investors, pay a $250,000 penalty, and disable trading in its "tokens." 12/23/2020
SEC v. Qin, et al. The Securities and Exchange Commission filed an emergency action and obtained an order imposing an asset freeze and other emergency relief against Virgil Capital LLC and its affiliated companies in connection with an alleged securities fraud relating to Virgil Capital's flagship cryptocurrency trading fund, Virgil Sigma Fund LP. The Commission's action alleges that the fraud was directed by Stefan Qin, an Australian citizen and part-time resident of New York, who owns and controls Virgil Capital and its affiliated companies. 12/22/2020
SEC v. Ripple Labs, Inc., et al. The Securities and Exchange Commission filed an action against Ripple Labs, Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering. 12/22/2020
ShipChain, Inc. The Securities and Exchange Commission filed a settled cease-and-desist proceeding against ShipChain, Inc. for conducting an unregistered initial coin offering of digital tokens, pursuant to which ShipChain agreed to pay a $2,050,000 penalty, transfer tokens in ShipChain's possession or control, publish notice of the order, and request removal of the tokens from digital asset trading platforms. 12/21/2020
SEC v. Elmaani The Securities and Exchange Commission charged Amir Bruno Elmaani, who goes by the online alias Bruno Block, for conducting an illegal securities offering of digital tokens and for his scheme to profit by minting millions of unauthorized tokens for himself at no cost and selling them into the secondary market, thereby causing the value of others' tokens to plummet. 12/9/2020
SEC v. McAfee, et al. The Securities and Exchange Commission charged businessman and computer programmer John McAfee for promoting investments in initial coin offerings to his Twitter followers without disclosing that he was paid to do so, and also charged McAfee's bodyguard Jimmy Watson, Jr. for his role in the alleged scheme. 10/5/2020
Salt Blockchain Inc. The Securities and Exchange Commission filed a settled cease-and-desist proceeding against Salt Blockchain Inc. for conducting an unregistered initial coin offering of digital tokens, pursuant to which Salt agreed to settle the action by returning the proceeds from the offering to harmed investors, registering the tokens as securities, and paying a civil penalty. 9/30/2020
SoluTech, Inc., et al. The Securities and Exchange Commission filed settled fraud charges against Connecticut-based SoluTech, Inc. and its former chief executive officer, Nathan Pitruzzello, in connection with a $2.4 million offering of digital asset securities that included an initial coin offering. 9/25/2020
Unikrn, Inc. The Securities and Exchange Commission filed a settled cease-and-desist proceeding against Unikrn, Inc., an operator of an online eSports gaming and gambling platform headquartered in Seattle, Washington, for conducting an unregistered initial coin offering of digital asset securities, pursuant to which Unikrn agreed to pay a $6.1 million penalty, disable Unikrn's tokens, publish notice of the order, and request removal of the tokens from digital asset trading platforms. 9/15/2020
SEC v. FLiK, et al. The Securities and Exchange Commission charged five Atlanta-based individuals, including film producer Ryan Felton, rapper and actor Clifford Harris, Jr., known as T.I. or Tip, and three others who each promoted one of Felton's two unregistered and fraudulent initial coin offerings (ICOs).  The SEC also charged FLiK and CoinSpark, the two companies controlled by Felton that conducted the ICOs.  9/10/2020
SEC v. Millan, et al. The Securities and Exchange Commission charged two high-level promoters for acting as unregistered brokers when selling the securities of AirBit Club, an investment scheme that targeted LatinX and Spanish-speaking communities and promised returns through a purported digital asset trading program and from the recruitment of others. 8/18/2020
Boon.Tech, et al. The Securities and Exchange Commission filed settled cease-and-desist proceedings charging Virginia-based Boon.Tech and its chief executive officer Rajesh Pavithran for fraud and registration violations in connection with a $5 million initial coin offering (ICO) of digital asset securities. 8/13/2020
SEC v. NAC Foundation, LLC, et al. The Commission filed a complaint charging NAC Foundation, its Chief Executive Officer Marcus Andrade, and political lobbyist Jack Abramoff with conducting a fraudulent, unregistered offering of AML BitCoin, a digital asset security the defendants claimed was a new and improved version of bitcoin. 6/25/2020
SEC v. High Street Capital Partners, LLC, et al. The Commission filed an emergency action and obtained a temporary restraining order and asset freeze against two Pennsylvania-based brothers and three entities they control to stop a cryptocurrency offering fraud and the misappropriation of investor proceeds. 6/16/2020
BitClave PTE Ltd. The Commission filed a settled cease-and-desist proceeding against BitClave PTE Ltd. for conducting an unregistered initial coin offering of digital asset securities, requiring company to return the proceeds from the $25.5 million offering and pay additional monetary relief to be distributed through a Fair Fund. 5/28/2020
SEC v. Putnam, et al. The Commission filed a complaint and obtained an asset freeze and other emergency relief against Daniel F. Putnam, of Utah, Jean Paul Ramirez Rico, of Colombia, and Angel A. Rodriguez, of Utah, who allegedly defrauded investors of more than $12 million in two cryptocurrency-related schemes. 5/7/2020
SEC v. Dropil, Inc., et al. The Commission filed a complaint against Dropil, Inc. and its three founders for allegedly conducting a fraudulent initial coin offering of unregistered digital asset securities raising money from thousands of investors. 4/23/2020
SEC v. Meta 1 Coin Trust, et al. The Commission filed an emergency action against Meta 1 Coin Trust, a former state senator, and two others for allegedly conducting a fraudulent initial coin offering of unregistered digital asset securities.  3/20/2020
Steven Seagal The Commission filed a settled cease-and-desist proceeding against an actor for failing to disclose payments he received for promoting an investment in an initial coin offering.  2/27/2020
Enigma MPC The Commission filed a settled cease-and-desist proceeding against a blockchain technology company for conducting an unregistered initial coin offering of digital tokens.  2/19/2020
SEC v. Ackerman The Commission filed a complaint against an Ohio-based businessman who allegedly orchestrated a digital asset scheme that defrauded approximately 150 investors, including many physicians.  2/11/2020
SEC v. Grybniak, et al. The Commission filed a complaint against a purported blockchain-marketplace company and its founder for allegedly conducting a fraudulent initial coin offering of unregistered digital asset securities.  1/21/2020
Blockchain of Things, Inc. The Commission filed a settled cease-and-desist proceeding against a blockchain technology company for conducting an unregistered initial coin offering of digital tokens.  12/18/2019
SEC v. Eyal, et al. The Commission filed a complaint against a digital-asset entrepreneur and his company for allegedly defrauding investors in an initial coin offering that raised more than $42 million from hundreds of investors.  12/11/2019
SEC v. Telegram Group Inc., et al. The Commission filed an emergency action and obtained a temporary restraining order against two offshore entities conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds.  10/11/2019
Block.one The Commission filed a settled cease-and-desist proceeding against a blockchain technology company for conducting an unregistered initial coin offering of digital tokens that raised the equivalent of several billion dollars over approximately one year.  9/30/2019
SEC v. Lucas The Commission filed a complaint against Jonathan C. Lucas, the former founder and chief executive officer of Fantasy Market, a purported online adult entertainment marketplace, for allegedly orchestrating a fraudulent initial coin offering.  9/20/2019
SEC v. ICOBox, et al. The Commission filed a complaint against ICOBox and its founder Nikolay Evdokimov alleging that they conducted an illegal $14 million securities offering of ICOBox’s digital tokens and acted as unregistered brokers for other digital asset offerings.  9/18/2019
SEC v. Bitqyck, Inc., et al. The Commission filed a settled district court action against an entity and two individuals that violated the registration and anti-fraud provisions of the Securities and Exchange Acts by offering and selling two unregistered digital asset securities, and the entity violated Section 5 of the Exchange Act by operating an unregistered national securities exchange, which the individuals aided and abetted.  8/29/2019
ICO Rating The Commission filed a settled cease-and-desist proceeding against Russian entity ICO Rating for violating Section 17(b) of the Securities Act by failing to disclose payments received from issuers for publicizing their digital asset securities offerings.  8/20/2019
SimplyVital Health, Inc. The Commission filed a settled cease-and-desist proceeding against a New England-based blockchain company for offering and selling approximately $6.3 million of securities to the public in unregistered transactions.  8/12/2019
SEC v. Middleton, et al. The Commission obtained an emergency asset freeze against Veritaseum, Inc., Veritaseum, LLC and Reginald ("Reggie") Middleton, alleging that the defendants violated the antifraud provisions and engaged in an unregistered offering of digital securities. 

8/12/2019

SEC v. Longfin Corp., et al.

SEC v. Longfin Corp., et al.

The Commission filed a district court action and obtained an emergency asset freeze against Longfin Corp., its CEO and three of its affiliates, alleging that the company and its CEO engaged in an unregistered distribution of securities and the three affiliates sold unregistered securities after the company announced a related-party acquisition of a purported cryptocurrency website, causing a dramatic increase its stock price. The Commission later filed an additional action against Longfin Corp. and its CEO asserting fraud claims for allegedly falsifying the company's revenue and, together with a former Longfin consultant, for fraudulently securing the company's listing on Nasdaq. 

6/5/2019

4/6/2018

SEC v. Kik Interactive Inc. The Commission filed a complaint against an ICO issuer for raising $100 million in an alleged unregistered securities offering that did not qualify for an exemption.  6/4/2019
SEC v. Pacheco The Commission filed a litigated district court action against the operator of an alleged $26.5 million pyramid scheme that enticed investors with points that were convertible into a cryptocurrency.  5/22/2019
NextBlock Global Ltd. and Alex Tapscott The Commission filed settled cease-and-desist proceedings against a Canadian corporation and its co-founder and former CEO for allegedly making misrepresentations in connection with a securities offering that raised $16 million to invest in blockchain companies and digital assets.  5/14/2019
SEC v. Natural Diamonds Investment Co., et al. The Commission obtained an emergency court order halting an alleged ongoing $30 million Ponzi scheme targeting more than 300 investors in the U.S. and Canada. Argyle Coin, LLC, a purported cryptocurrency business, and its principal lured investors by falsely claiming an investment in Argyle Coin was risk-free because it was backed by fancy colored diamonds, and promising to use investor funds to develop the cryptocurrency business.  5/13/2019
Mutual Coin Fund LLC and Usman Majeed The Commission filed settled cease-and-desist proceedings against a Michigan-based hedge fund manager and its principal for making misrepresentations and engaging in the unregistered, non-exempt sale of limited partnership interests in a fund it managed that invested in digital assets.  4/1/2019
Gladius Network LLC The Commission filed a settled cease-and-desist proceeding against a Washington, D.C.-based company that raised $12.7 million in an unregistered, non-exempt ICO and then self-reported to the Commission.  2/20/2019
CoinAlpha Advisors LLC The Commission filed settled cease-and-desist proceedings against a California-based hedge fund manager for engaging in the unregistered, non-exempt sale of limited partnership interests in a fund it managed that invested in digital assets.  12/7/2018
Floyd Mayweather, Jr. The Commission filed settled cease-and-desist proceedings against a celebrity who promoted ICOs on social media without disclosing the fact and amount of compensation he received from the issuers for the promotions. 11/29/2018
Khaled Khaled ("DJ Khaled") The Commission filed settled cease-and-desist proceedings against a celebrity who promoted an ICO on social media without disclosing the fact and amount of compensation he received from the issuer for the promotions. 11/29/2018
Paragon Coin, Inc. The Commission filed a settled cease-and-desist proceeding against an online company, Paragon Coin, in connection with its unregistered offering of tokens in an ICO that raised approximately $12 million to implement blockchain technology in the cannabis industry.  The Commission concluded that the PRG tokens were securities, and that the offering did not qualify from any exemption from registration. 11/16/2018
CarrierEQ, Inc., d/b/a Airfox The Commission filed a settled cease-and-desist proceeding against a Boston-based start-up, Airfox, in connection with its unregistered offering of tokens in an ICO that raised approximately $15 million to develop a token-denominated “ecosystem.”  The Commission concluded that the AIR tokens were securities, and that the offering did not qualify from any exemption from registration.   11/16/2018
Zachary Coburn The Commission filed a settled cease-and-desist proceeding against the founder of a digital asset trading platform for secondary market trading of ERC20 tokens, EtherDelta, for causing the trading platform to operate as an unregistered national securities exchange. 11/8/2018
SEC v. Blockvest LLC, et al. The Commission obtained an emergency court order halting a planned ICO and ongoing pre-ICO sales. The Commission alleged that Blockvest and its founder falsely claimed they received regulatory approval from various agencies (including the SEC) for the ICO, used the SEC seal without permission and a made-up regulatory agency to promote the ICO, and falsely claimed that Blockvest would be the first “licensed and regulated” cryptocurrency fund. 10/11/2018
SEC v. 1pool Ltd. a.k.a. 1Broker, et al. The Commission charged 1Broker and its CEO with registration violations in connection with their overseas trading platform that exclusively used bitcoins and offered and sold to U.S. residents Contracts for Difference that track U.S.-listed securities and are security-based swaps. The Commission also alleged that 1Broker and its CEO failed to register the offer and sale of the products, failed to transact these products on a registered national exchange, performed no know-your-customer (KYC) inquiries, and acted as an unregistered dealer. 9/27/2018
TokenLot LLC, Lenny Kugel, and Eli Lewitt The Commission filed settled administrative proceedings against a Michigan-based company and self-described “ICO Superstore” and its two owners for operating as unregistered broker-dealers in digital tokens sold in connection with ICOs and secondary market activities. 9/11/2018
Crypto Asset Management, LP and Timothy Enneking The Commission filed settled administrative proceedings against a California-based hedge fund manager and its sole principal for offering a fund formed to invest in digital assets that operated as an unregistered investment company while falsely marketing it as the "first regulated crypto asset fund in the United States." 9/11/2018
Tomahawk Exploration LLC and David T. Laurance The Commission obtained officer-and-director and penny stock bars in a settlement with the founder of a company responsible for a fraudulent ICO to fund oil exploration and drilling. 8/14/2018
SEC v. Jesky, et al. The Commission filed a settled district court action against two individuals who illegally sold restricted shares in UBI Blockchain Internet Ltd. at high market prices instead of the fixed price under a registration statement. The Commission previously suspended trading in the stock. The two individuals agreed to return approximately $1.4 million in ill-gotten gains and more than $188,000 in penalties. 7/2/2018
SEC v. Titanium Blockchain Infrastructure Services Inc., et al. The Commission obtained a court order halting an alleged ongoing fraud involving an ICO. The court also approved an emergency asset freeze and the appointment of a receiver. 5/22/2018

SEC v. Sharma, et al.

SEC v. Sharma, et al.

The Commission filed a district court action against two co-founders of Centra Tech, Inc., a purported financial services start-up, charging them with orchestrating an allegedly fraudulent ICO.  The Commission later filed an amended complaint against a third member of Centra Tech, Inc., charging him with orchestrating the fraudulent ICO.

4/20/2018

4/2/2018

SEC v. Montroll, et al. The Commission filed a district court action against a former bitcoin-denominated platform and its operator for allegedly operating an unregistered securities exchange and defrauding users of that exchange. The SEC also charged the operator with making alleged false and misleading statements in connection with an unregistered offering of securities. 2/21/2018

SEC v. AriseBank, et al.

Jared Rice Sr. and Stanley Ford

The Commission filed a district court action and obtained an emergency asset freeze against an allegedly fraudulent ICO that claimed to run the world’s first “decentralized bank.”  The Commission later settled with two former executives behind the allegedly fraudulent ICO in December 2018.

1/25/2018

12/11/2018

In re Munchee, Inc The Commission filed a settled cease-and-desist order against a California-based company selling digital tokens in an unregistered offering to investors to raise capital for its blockchain-based food review service. 12/11/2017
SEC v. PlexCorps, et al. The Commission filed a district court action and obtained an emergency asset freeze against a recidivist Quebec securities law violator, Dominic Lacroix, and his company, PlexCorps. 12/1/2017
SEC v. REcoin Group Foundation, LLC, et al. The Commission charged Maksim Zaslavskiy and his two companies for allegedly defrauding investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds (Recoin Group Foundation and Diamond Reserve Club). 9/29/2017
Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO The Commission issued a Report of Investigation concerning the application of the U.S. federal securities laws to the offer and sale of DAO Tokens, which were virtual tokens created and distributed on a blockchain by an entity called “The DAO.” 7/25/2017
SEC v. Renwick Haddow, et al. The Commission filed a district court action and obtained an emergency asset freeze against Renwick Haddow, the founder of a purported Bitcoin holding-and-trading platform and a chain of co-working spaces, alleging that he defrauded investors in both companies while also hiding his connection given his past disciplinary history with U.K. regulators. 6/30/2017
In re Bitcoin Investment Trust and SecondMarket, Inc. The Commission filed a settled administrative proceeding against SecondMarket, Inc., a New York broker-dealer registered with the Commission, and Bitcoin Investment Trust (BIT), a Delaware trust whose sole assets are bitcoins. Each agreed to settle charges that they respectively violated Rules 101 and 102 of Regulation M under the Securities Exchange Act of 1934 in connection with their purchases of BIT shares during a continuous distribution. 7/11/2016
SEC v. Garza, et al. The Commission charged Garza and his two bitcoin mining companies with conducting an alleged Ponzi scheme by offering shares – called “Hashlets” – in a bitcoin mining operation that did not have enough computing power for the mining they promised to conduct. 12/1/2015
In re Sand Hill Exchange, et al. In June 2015, the SEC filed a settled administrative action against 2 entrepreneurs who offered and sold security-based swaps through a website called Sand Hill exchange and sought people to fund accounts at Sand Hill using dollars or bitcoins. 6/17/2015
In re BTC Trading, Corp. and Ethan Burnside The Commission brought a settled administrative proceeding against Burnside, a video game programmer and bitcoin hobbyist, for (a) operating two online venues for trading securities – BTC Virtual Stock Exchange and LTC-Global Virtual Stock Exchange – using bitcoin and litecoin without registering the sites as broker-dealers or stock exchanges, and (b) conducting two unregistered offerings, one in LTC-Global itself, and another in a litecoin mining venture he owned and operated. 12/8/2014
In re Erik T. Voorhees The Commission charged Voorhees, a Bitcoin entrepreneur with the offer and sale of unregistered securities in SatoshiDICE, a well-known bitcoin betting game, and FeedZeBirds, a social media marketing venture. 6/3/2014
SEC v. Shavers The Commission charged Shavers and his company with defrauding investors in a bitcoin-denominated Ponzi scheme, raising more than 700,000 bitcoins in principal investments from BTCST investors, and falsely promising of up to 7% weekly returns based on BTCST’s purported bitcoin market arbitrage activity. 7/23/2013

Account Intrusions

Action Name Description Date Filed
SEC v. Willner Day trader allegedly hacked into over 100 online customer brokerage accounts to manipulate the price of securities generating at least $700,000 in illicit profits 10/30/2017
SEC v. Mustapha Overseas trader allegedly hacked into online customer brokerage accounts to manipulate stock prices through unauthorized trades 6/22/2016
SEC v. Murmylyuk Trader allegedly hacked into online customer brokerage accounts to manipulate stock prices through unauthorized options trades 4/17/2012
SEC v. Nagaicevs Overseas allegedly trader hacked into online customer brokerage accounts to manipulate stock prices through unauthorized trades 1/26/2012

Hacking/Insider Trading

Action Name Description Date Filed
SEC v. Watson, et al. The Commission charged three individuals with insider trading in advance of an announcement by Long Blockchain Company (formerly known as Long Island Iced Tea Co.) that it was going to "pivot" from its existing beverage business to blockchain technology, which caused the company’s stock price to soar. 7/9/2021
SEC v. Ieremenko, et al. The Commission filed a district court action alleging that Ieremenko, working with others, hacked into the SEC's EDGAR system and extracted test files containing nonpublic information about upcoming quarterly earnings announcement to use for illegal trading. 1/15/2019
SEC v. Hong, et al. Overseas traders allegedly hacked into two U.S. law firms to obtain nonpublic information on which they traded 12/27/2016
SEC v. Ly IT specialist allegedly hacked into the email accounts of senior executives of his employer to obtain nonpublic information on which he traded 12/5/2016
SEC v. Zavodchiko, et al. Overseas trading ring allegedly hacked into the servers of newswire services to obtain nonpublic information on which they traded 2/18/2016
SEC v. Dubovoy, et al. Overseas trading ring allegedly hacked into the servers of newswire services to obtain nonpublic information on which they traded 8/11/2015

Market Manipulation/False Tweets/Fake Websites/Dark Web

Action Name Description Date Filed
SEC v. Gallagher The Commission filed an emergency action, and obtained an injunction and asset freeze, against Steven M. Gallagher for allegedly committing securities fraud through a long running scheme to manipulate stocks using Twitter. 10/26/2021
SEC v. Melnick The Commission charged Mark Melnick, the host of a stock trading webcast, for spreading more than 100 false rumors about public companies in order to generate illicit profits. 9/30/2021
SEC v. Trovias The Commission charged Apostolos Trovias, a Greek national, with perpetrating a fraudulent scheme to sell what he called "insider trading tips" on the Dark Web. The Dark Web, which facilitates anonymity by obscuring users’ identities, allows users to purchase and sell illegal products and services, and in this case, insider trading tips.  7/9/2021
SEC v. Jones The Commission filed charges against James Roland Jones of Redondo Beach, California, for perpetrating a fraudulent scheme to sell what he called “insider tips” on the dark web.  The dark web allows users to access the internet anonymously and, as such, has often been used to host websites and marketplaces that support or promote illegal activity.  This is the SEC’s first enforcement action involving alleged securities violations on the dark web.  3/18/2021
SEC v. Fassari The Commission filed fraud charges and obtained an asset freeze and other emergency relief against an Irvine, California-based trader who used social media to spread false information about a defunct company, while secretly profiting by selling his own holdings of the company's stock. 3/2/2021
SEC v. Ross The Commission filed charges against Barton S. Ross for his role in a market manipulation scheme in which he and several other individuals created false rumors about public companies in order to profitably trade around the temporary price increases caused by the publication of the rumors. 12/18/2020
SEC v. Sotnikov, et al. The Commission filed charges against a Russian national and entities he controlled for allegedly participating in a fraudulent scheme to lure U.S. investors into buying fictitious Certificates of Deposit (CDs) promoted through internet advertising and “spoofed” websites that mimic the actual sites of legitimate financial institutions. 3/13/2020
SEC v. Burns U.S.-based trader allegedly filed false tender offer form on EDGAR to manipulate stock price 7/11/2018
SEC v. Murray U.S.-based trader allegedly filed false tender offer form on EDGAR to manipulate stock price 5/19/2017
SEC v. Aly Overseas trader allegedly manipulated stock price by filing false Schedule 13D form on EDGAR 5/24/2016
SEC v. Craig Overseas trader allegedly disseminated false tweets to manipulate stock prices 11/6/2015
SEC v. PTG Capital Partners LTD, et al. Overseas trader allegedly manipulated prices of stocks through false EDGAR filings 6/4/2015

Regulated Entities – Cybersecurity Controls and Safeguarding Customer Information

Action Name Description Date Filed
KMS Financial Services, Inc.; Cetera Advisor Networks LLC, et al.; Cambridge Investment Research, Inc., et al. The Commission sanctioned eight firms in three actions for failures in their cybersecurity policies and procedures that resulted in email account takeovers exposing the personal information of thousands of customers and clients at each firm. The eight firms, which have agreed to settle the charges, are: Cetera Advisor Networks LLC, Cetera Investment Services LLC, Cetera Financial Specialists LLC, Cetera Advisors LLC, and Cetera Investment Advisers LLC (collectively, the Cetera Entities); Cambridge Investment Research Inc. and Cambridge Investment Research Advisors Inc. (collectively, Cambridge); and KMS Financial Services Inc. (KMS). All were Commission-registered as broker dealers, investment advisory firms, or both. 8/30/2021
GWFS Equities, Inc. The Commission filed settled charges against GWFS Equities Inc. (GWFS), a Colorado-based registered broker-dealer and affiliate of Great-West Life & Annuity Insurance Company, for violating the federal securities laws governing the filing of Suspicious Activity Reports (SARs). GWFS provides services to employer-sponsored retirement plans. 

According to the SEC’s order, from September 2015 through October 2018, GWFS was aware of increasing attempts by external bad actors to gain access to the retirement accounts of individual plan participants. The order further finds that GWFS was aware that the bad actors attempted or gained access by, among other things, using improperly obtained personal identifying information of the plan participants, and that the bad actors frequently were in possession of electronic login information such as user names, email addresses, and passwords.

5/12/2021
Virtu Americas LLC (f/k/a KCG Americas LLC) The Commission filed a settled cease-and-desist proceeding against Virtu Americas LLC (f/k/a KCG Americas LLC) for failing to comply with certain provisions of Regulation SCI in connection with the dark pool formerly known as KCG MatchIt. 9/30/2019
The Options Clearing Corporation The Commission filed a settled cease-and-desist and administrative proceeding against a registered clearing agency for violating Exchange Act Rules 17Ad-22(b)(2) and (e)(1), (3), (4), (6) and (7), Reg. SCI, and Section 19(b)(1) of the Exchange Act and Rule 19b-4(c) thereunder as a result of its failures to establish and enforce policies and procedures involving financial risk management, operational requirements and information-systems security and changing of policies on core risk management issues without obtaining the required SEC approval. 9/4/2019
Voya Financial Advisors The Commission filed settled administrative proceedings against an Iowa-based broker-dealer and investment adviser related to its failures in cybersecurity policies and procedures surrounding a cyber intrusion that compromised personal information of thousands of its customers, in violation of Reg S-P and Reg S-ID. 9/26/2018
Morgan Stanley Smith Barney LLC Failure to safeguard customer data from cyber-breaches in violation of Reg S-P stemming from a Morgan Stanley employee transferring confidential customer data to a personal server that was eventually hacked. 6/8/2016
RT Jones Capital Equities Management, Inc. Failure to safeguard customer data from cyber-breaches in violation of Reg S-P as a result of an investment adviser's storage of sensitive customer information on a third-party hosted web server that was eventually hacked and its failure to adopt written policies and procedures reasonably designed to safeguard such customer information.  9/22/2015

Public Company Disclosure and Controls

Action Name Description Date Filed
Pearson plc The Commission filed settled charges against Pearson plc, a London-based public company that provides educational publishing and other services to schools and universities.  Pearson agreed to pay $1 million to settle charges that it misled investors about a 2018 cyber intrusion involving the theft of millions of student records, including dates of births and email addresses, and had inadequate disclosure controls and procedures. 8/16/2021
First American Financial Corporation The Commission filed settled charges against real estate settlement services company First American Financial Corporation for disclosure controls and procedures violations related to a cybersecurity vulnerability that exposed sensitive customer information. 6/14/2021
Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Certain Cyber-Related Frauds Perpetrated Against Public Companies and Related Internal Accounting Controls Requirements The Commission issued a Report of Investigation regarding certain cyber-related frauds and public company issuer internal accounting controls requirements.  The Report discusses a type of cyber-fraud -- called "business email compromise" -- where perpetrators pretended in emails to be high-level company executives or vendors, and then convinced company personnel to transmit large wire transfers to accounts controlled by the perpetrators.  The Report explains that public companies should consider cyber threats when implementing internal accounting controls.  10/16/2018
Altaba Inc., f/d/b/a Yahoo! Inc. Failure to disclose December 2014 data breach in which Russian hackers stole personal data related to more than 500 million Yahoo! user accounts; the data breach was not disclosed until September 2016.   4/24/2018

Trading Suspensions

Action Name Description Date Filed
Long Blockchain Corp. The Commission revoked registration of the securities of Long Blockchain Corp., a beverage business that had announced a shift to become a blockchain technology business which never became operational, for failure to file quarterly and annual reports.  2/22/2021
Bitcoin Generation, Inc. The Commission suspended trading in the securities of BTGN, inter alia, because of concerns about the accuracy and adequacy of information contained in BTGN’s public statements and because of stock promotional activity relating to BTGN and the market impact of such promotional activity. 4/29/2019
American Retail Group, Inc. aka Simex, Inc. The Commission suspended trading in the securities of ARGB amid questions surrounding statements claiming that the company had partnered with an SEC-qualified custodian for use with cryptocurrency transactions and that the company was conducting a token offering that was “officially registered in accordance [with] SEC requirements.” 10/22/2018
Bitcoin Tracker One and Ether Tracker One The Commission suspended trading in the securities of CXBTF and CETHF because of confusion among market participants regarding the true nature of these instruments. 9/9/2018
Evolution Blockchain Group Inc. The Commission suspended trading in Evolution Blockchain Group Inc. because of questions about the accuracy of information contained in a press release and concerns about recent unusual and unexplained market activity in the company’s common stock. 6/25/2018
IBITX Software Inc. The Commission suspended trading in IBITX because of questions about the accuracy of assertions concerning the company’s development of alternative forms of currency and its operation of a cryptocurrency platform. 4/20/2018
HD View 360 Inc. The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information about the company, including certain statements regarding enhancing a subsidiary with blockchain technology. 3/1/2018
Cherubim Interests, Inc. The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace including in press releases issued. 2/16/2018
PDX Partners, Inc., The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the nature of the company’s business operations and the value of its assets. 2/16/2018
Victura Construction Group, Inc., The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the nature of the company’s business operations and the value of its assets, including in press releases issued. 2/16/2018
UBI Blockchain Internet, Ltd. The Commission suspended trading in this publicly-traded company because of (i) questions regarding the accuracy of assertions, since at least September 2017, by UBIA in filings with the Commission regarding the company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the company’s Class A common stock since at least November 2017. 1/5/2018
The Crypto Co. The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the company, and statements in Commission filings about the plans of the company’s insiders to sell their shares of The Crypto Company’s common stock. 12/18/2017
In re Rocky Mountain Ayres, Inc. The Commission suspended trading in this publicly-traded company because of questions regarding by RMTN in a press release dated August 22, 2017, and in the “Project White Paper” documents, accessible through a link in the press release, concerning, among other things, the Kairos ETF. 9/15/2017
In re American Security Resources Corp. The Commission suspended trading in this publicly-traded company because of questions regarding information concerning the company’s transition to the cryptocurrency markets and early adoption of blockchain technology. 8/24/2017
In re First Bitcoin Capital Corp. The Commission suspended trading in this publicly-traded company because of concerns regarding the accuracy and adequacy of information about the company’s value of the company’s assets and capital structure. 8/23/2017
In re CIAO Group, Inc. The Commission suspended trading in this publicly-traded company because of questions regarding the accuracy of assertions concerning business plans in the telecommunications industry and plans for an ICO. 8/9/2017
In re Strategic Global Investments, Inc. The Commission suspended trading in the securities of this publicly-traded company because of questions regarding the accuracy of assertions by the company concerning ICOs. 8/3/2017
In re Sunshine Capital, Inc. The Commission suspended trading in the securities of this publicly-traded company because of questions regarding the accuracy of assertions by the company concerning the liquidity and value of the company’s assets, namely DIBCOINS, a cryptocurrency the company’s majority shareholder had created. 4/11/2017
In re Imogo Mobile Technologies Corp. The Commission suspended trading in the securities of this publicly-traded company amidst questions about its business which touted, among other things, the development and testing of a purportedly secure mobile Bitcoin platform. 2/19/2014

Return to Cybersecurity Spotlight page

Return to Top