District Judge Charles Pannell dismissed a lawsuit on March 3, claiming securities fraud charges against rapper ‘T.I.’ for selling FLiK tokens. He is accused of committing this illegality when he sold the tokens for his company’s initial coin offering (ICO) in August 2017.
The Judge did not find concrete evidence of securities violations or negligent misrepresentation as T.I. made no allegations about the value of the FLiK tokens:
“The plaintiffs have merely alleged that Harris encouraged his Twitter followers to visit the website for the FLiK ICO. They have not provided any statements from Harris about the value of the FLiK tokens. The facts as pleaded do not rise to the level of particularity required.”
According to Judge Pannell, the plaintiffs had failed to demonstrate that T.I.’s actions amounted to securities violations according to the Georgia Uniform Securities Act:
“The company is not physically located within the boundaries of the state of Georgia. None of the plaintiffs reside in Georgia or allege that they have traveled to Georgia, therefore the acceptances were executed outside of Georgia. The plaintiffs have not alleged that any funds were sent to or from any financial institutions or accounts located in Georgia.”
T.I.’s attorney, Albert Chapar, said that they were highly pleased with the Judge’s verdict.
Rapper sued for securities fraud in November 2018
Born as Clifford Harris Jr., the rapper faced charges of state securities fraud, negligent misinterpretation, unjust enrichment, and punitive damages for selling the tokens for his FLiK ICO.
25 FLiK investors sued the rapper together with his business partner Ryan Felton in November 2018. They were accused of recruiting investors into a pump and dump scheme. Between August and October 2017, the price of FLiK grew by 400% from $0.06 to $0.30 but dropped 53% over the next three months to trade at $0.14.
In April 2018, the company announced that it had missed the launch date for its platform. The price dropped to $0.08 by August 2018. The plaintiffs claimed to have lost over $2 million collectively.
In May 2019, the plaintiffs filed an amended complaint to feature entertainer Kevin Hart for promoting the ICO on social media. The court is yet to hear the allegations made against Hart.
Steven Seagal charged for ICO promotion
The United States Securities and Exchange Commission (SEC) last week ordered actor Steven Seagal to pay $330,000 to the U.S. He was ordered to pay the fine for failing to disclose that he received payments to promote the ‘Bitcoiin2Gen’ ICO in 2018.