The SEC has recently revealed that it has settled its charges against CEO John Wise and his company Loci Inc. following accusations that the entity had made materially misleading and false statements regarding a sale and offer of digital asset securities that were later found to be unregistered. According to the latest announcement, the Securities and Exchange Commission found that Loci had offered an intellectual property search product for its investors and general users via its software platform, InnVenn.
The order has now determined that between August 2017 and January 2018, Loci and its CEO raised around $7.6 million from its investors by offering and selling its own digital currency named “LOCIcoin.”. The order states that surrounding the promotion of the ICO by the firm, both Wise and his company made several materially incorrect statements to its investors and interested clientele, including false data regarding Loci Inc’s revenues, its InnVenn user base, and its total number of employees. The order concluded that CEO Wise misused $38,163 of investor proceeds to pay off his own personal expenses. The SEC found that although LOCIcoins did, in fact, constitute securities, the offering itself was never formally registered with the SEC, despite the fact that no exemption from registration existed.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, stated:
Loci and its CEO misled investors regarding critical aspects of Loci’s business. Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.
Although Wise and his company have neither admitted to nor denied the SEC’s discoveries, they have now come to an agreement in the form of a cease and desist order and will also destroy any remaining tokens. They are also required to publish the order on Loci’s social media channels and cannot participate in any future securities offerings. The SEC has imposed a $7.6 million civil penalty upon Loci, while Wise has received a director and officer bar.
The recent investigation was reportedly led by Kathleen Hitchins and Brian Fitzsimons from the SEC’s Cyber Unit, alongside Donald Furlano, who assisted with the inquiry. Supervision came from Carolyn M. Welshhans, Brian O. Quinn, and Kristina Littman.
Earlier in June, the SEC announced in an official press release that it charged 3 individuals concerning an ICO scam worth around $30 million.
Whistleblower recently received over $5.3 million award from the SEC for providing key information on separate enforcement proceedings.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.