The next round of settlement discussions has been set for June 25, 2019.
The proceedings against PlexCorps aka PlexCoin and Sidepay.ca, Dominic Lacroix and Sabrina Paradis-Royer, accused of perpetrating a multi-million dollar fraudulent scheme on thousands of investors continue at the New York Eastern District Court.
The latest Court filings show that the United States Securities and Exchange Commission (SEC), which has brought this enforcement action, has been engaged in settlement talks with the defendants since early April this year. At least three conferences dedicated to settlement discussions were held over the past several months, with the last one held on June 17, 2019. Next conference is scheduled for June 25, 2019.
In its complaint, the US regulator says that it has to take an emergency action to stop Lacroix, a recidivist securities law violator In Canada, and his partner Paradis-Royer from further misappropriation of investor funds illegally raised through the fraudulent and unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”.
From August 2017 through the present, the defendants have obtained investor funds, purportedly $15 million from thousands of investors, including those throughout the United States and in the Eastern New York District, through materially false and misleading statements.
Lacroix and Paradis-Royer allegedly misappropriated investor funds and engaged in other deceptive acts relating to investments in the PlexCoin Token, despite having both been enjoined by a Quebec tribunal from engaging in the activities that are the subject of the SEC action.
SEC notes that the ICO for the PlexCoin Tokens was an illegal offering of securities because there was no registration statement filed or in effect during its offer and sale, and no applicable exemption from registration. The PlexCoin ICO was a general solicitation made using statements posted on the Internet and distributed throughout the world, including in the United States, and the securities were offered to the general public and have been sold to a large number of investors, including many in the United States and in the Eastern District of New York.
To avoid the registration requirements of the federal securities laws, Lacroix has attempted to refashion the PlexCoin Tokens as a “cryptocurrency” and likened them to Bitcoin, SEC explains. In reality, the regulator says, PlexCoin Tokens are securities within the meaning of the U.S. federal securities laws.
The illegal PlexCoin ICO has occurred despite Lacroix being the subject of previous orders by the Quebec Financial Markets Administrative Tribunal enjoining him from future violations of the Quebec Securities Act, and despite having pled guilty before a Quebec court of securities fraud.
SEC’s Complaint says the defendants violated securities regulations in the United States, including the Securities Act of 1993 and the Securities Exchange Act of 1934.