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SEC Settlement: Illegal Cryptocurrency Stock Sellers Dictated to Return Ill-Gotten Profits

SEC Settlement: Illegal Cryptocurrency Stock Sellers to Return Ill-Gotten Profits

Reading Time: 2 minutes by on July 6, 2018 Altcoins, Bitcoin, Blockchain, Crime, News, Regulation
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A lawyer and his firm’s business affairs manager in the state of Nevada have reached an agreement with the Security and Exchange Commision (SEC) to settle their ongoing illegal stock sale case. Attorney T.J. Jesky and his right-hand man Mark F. DeStefano were named in a lawsuit by the SEC, accused of reaping profits of about $1.4 million through the illegal sale of restricted UBI Blockchain Internet stock in their possession.

UBI Blockchain “Suspicious Activity”

According to the SEC press release, the stock sale was reported to have “unusual and unexplained market activity,” and as so, the government agency ordered a lawsuit on the two suspects.

The duo ended up agreeing with the trial imposed by the regulatory body and returned all $1.4 million in profits. Even though the two men did not admit or deny their fault or relation with the accusation, they both agreed to pay over $180,000 in fines.

BTCManager reported in January 2018 that the SEC ordered the suspension of trading in UBI Blockchain stocks after its share price inexplicably jumped by 900 percent, hitting a staggering $115 per share. After suspecting illegal market activity aimed at artificially inflating a stock, UBI Blockchain stock trading was frozen temporarily.

In the brief period that trading went on with the unusually high share price, UBI Blockchain briefly became one of the most highly valued stocks on the cryptosphere.

The stocks of the Hong Kong-based company, which provides Internet of Things (IoT) solutions for food, healthcare and pharmaceutical applications became extremely sought after, sparking a market rush that the SEC preemptively nipped in the bud while it tried to establish what exactly led to the significant price jump.

No evidence of foul play was discovered eventually, and trading resumed on January 22, 2018.

SEC Illegal Selling Lawsuit

Jesky and DeStefano were brought up on charges of illegally benefiting from the market conditions by selling 72,000 restricted UBI shares in their possession at prices ranging from $21.12 to $48.40, instead of the fixed price of $3.70 the shares should have gone for. The transactions were made between December 2017 and January 2018, and they netted the duo a total of $1.4 million.

The illegal sales were detected when the SEC halted UBI stock trading to investigate “unusual and unexplained market activity,” and the two men were consequently brought upon the charges.

As part of the settlement agreed with the regulator, DeStefano and Jesky will return $1.14 million in profit from the sales, plus a total of $188,862 in penalties. In return, the claims against them will be settled, and the case closed, without either them admitting or denying the allegations raised in the lawsuit.

BTCManager reported that the SEC had been kept very busy by a series of preemptive and responsive actions relating to crypto trading and investment. Famous bitcoin advocate and ICO shill John McAfee recently received a notice from the SEC halting his regular ICO marketing tweets because the agency feared that the market effect of the tweets was effectively a ‘pump-and-dump’ scheme.

The article was co-authored by BTCManager journalist Nuno Menezes.

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