The US Securities and Exchange Commission (SEC) has obtained a court order to halt all activities of an ICO that allegedly defrauded investors. The SEC announced the injunction in a press release last May 29. According to the same release, the company, Titanium Blockchain Infrastructure Services Inc. has reportedly raised $21 mln from investors both in and outside of the US.
A complaint made to the SEC alleged that Titanium President Michael Alan Stollery, or “Michael Stollaire” had actually lied about having business relationships with the Federal Reserve, as well as dozens of other industry titans such as Boeing, Verizon, PayPal, and Walt Disney.
The SEC also claims that Stollaire publicly claimed to have working relationships with corporate clients and had fabricated testimonials posted on the Titanium website. The press release also mentions that Stollaire promoted the ICO through videos and social media, having compared investing in his company to investing in Intel or Google.
Robert A. Cohen, chief of the SEC Enforcement Division’s Cyber Unit had this to say:
“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects. Having filed multiple cases involving allegedly fraudulent ICOs, we again encourage investors to be especially cautious when considering these as investments.”
The SEC first filed the complaint May 22nd in the federal district court of Los Angeles. Stollaire and Titanium were both charged with violating anti-fraud and registration provisions of federal securities laws. The SEC sought preliminary and permanent injunctions and sought the return of “ill-gotten gains” to investors with penalties and interest. The SEC is also seeking to permanently bar Stollaire from participating in digital securities offerings in the future.