The Securities and Exchange Commission today announced 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.
“Loci and its CEO misled investors regarding critical aspects of Loci’s business,” said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. “Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.
”The company provided an intellectual property search service for investors through its InnVenn software platform, and between August of 2017 and January 2018 they raised $7.6 million through coin sales. According to the SEC both Loci and Wise during this period made materially false statements on topics including revenues, user base and staffing numbers. Wise also misused $38,163 in investor funds to pay personal expenses, the SEC found.
Without admitting or denying the SEC’s findings, Loci and Wise agreed to a cease and desist order and to undertakings to destroy their remaining tokens, request the removal of the tokens from trading platforms, publish the SEC’s order on Loci’s social media channels, and refrain from participating in future digital asset securities offerings. The SEC’s order also imposes a $7.6 million civil penalty against Loci, and an officer and director bar as to Wise.
The SEC’s investigation was conducted by Brian Fitzsimons and Kathleen Hitchins of the Cyber Unit with assistance from Donald Furlano, and supervised by Brian O. Quinn, Carolyn M. Welshhans, and Ms. Littman.
