SoluTech settles fraud charges with SEC, former exec to pay $25K fine

The US Securities and Exchange Commission announced that it settled fraud charges against SoluTech, Inc. and Nathan Pitruzzello, its former chief executive officer, regarding $2.4 million offering of digital asset securities that included an initial coin offering (ICO).

According to the US watchdog, between April 2018 and March 2019, SoluTech and Pitruzzello offered and sold securities in the form of digital assets named SCRL, which later became XD, to fund the development of a blockchain-based platform Scroll Network and additional technology products.

The SEC found that SoluTech raised around $2.4 million from over 100 investors through its offering. The SCRL tokens were securities, however SoluTech and Pitruzzello failed to register the offering. The SEC’s order further finds that SoluTech and Pitruzzello falsely claimed that the company had paying clients and was generating revenues, as well as made false statements regarding the functionality and status of its products.

SEC penalty, fine

The SEC alleges that SoluTech and Pitruzzello misrepresented the investors’ interest in investing in SoluTech regarding SoluTech’s and Pitruzzello’s attempt to raise funds through a Series A stock offering.

The US regulator found that SoluTech and Pitruzzello violated the Securities Act and without admitting or denying these findings, SoluTech and Pitruzzello consented to the requirements of SEC’s order. SoluTech agreed to destroy all SCRL in its possession and remove SCRL from any further trading on third-party digital asset trading platforms.

SEC’s order also requires that Pitruzzello refrain from participating in any offering of any digital asset security and pay a fine in the amount of $25,000 over a three-year period. The Commission also took into consideration SoluTech’s decision to self-report the matter and its extensive cooperation with the staff’s investigation in determining not to impose a civil penalty.

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