Rapper T.I. settles with SEC over fraudulent initial coin offerings | National

ATLANTA — Rapper T.I. has settled charges with the Securities and Exchange Commission related to his promotion of one of two unregistered and fraudulent initial coin offerings.

T.I. is required to pay a $75,000 civil monetary penalty and “not participate in offerings or sales of digital-asset securities for at least five years,” according to the SEC release.

The SEC said it found T.I. promoted film producer Ryan Felton’s company FLiK, according to the news release.

The rapper, whose real name is Clifford Harris, was among five individuals who promoted one of Felton’s companies. Felton’s other company is CoinSpark. Both companies were also charged.

T.I. offered and sold FLiK tokens on his social media accounts and falsely claimed to be a FLiK co-owner, according to the SEC’s findings. He encouraged his followers to invest in the FLiK ICO and asked a celebrity friend to promote the ICO. He also provided language for the posts, which referred to FLiK as T.I.’s “new venture.”

According to the complaint, T.I.’s social media manager, William Sparks Jr., offered and sold FLiK tokens on T.I.’s social media accounts.

“The federal securities laws provide the same protections to investors in digital asset securities as they do to investors in more traditional forms of securities,” Carolyn M. Welshhans, associate director in the Division of Enforcement, said in a statement. “As alleged in the SEC’s complaint, Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading.”

Other than Felton, all of the individuals agreed to settlements to resolve the charges against them, according to the release.

Felton was charged with violating registration, antifraud and anti-manipulation provisions of the federal securities laws. The companies are charged with violating registration and anti-fraud provisions.

According to the SEC’s complaint, Felton promised to build a digital streaming platform for FLiK and promised to build a digital asset trading platform for CoinSpark.

The complaint says that, instead of doing those things, Felton misappropriated funds raised in the ICOs and secretly transferred FLiK tokens to himself and sold them into the market, making $2.2 million in profits. He used the funds he misappropriated and the funds of manipulative trading from the other company to buy a Ferrari, a million-dollar home, diamond jewelry and other luxury goods, according to the SEC release.

———

(c)2020 The Atlanta Journal-Constitution (Atlanta, Ga.)

Visit The Atlanta Journal-Constitution (Atlanta, Ga.) at www.ajc.com

Distributed by Tribune Content Agency, LLC.

—————

PHOTO (for help with images, contact 312-222-4194):RAPPER-SETTLEMENT

Copyright 2020 Tribune Content Agency.

Source link

Leave a comment