Judge Dale S, a California District Court Judge, has issued a verdict against the lawsuit on ICObox and its founder Nikolay Evdokimov. According to the verdict, Evdokimov and his company are severally and jointly liable for a $16 million disgorgement. The lawsuit was brought against the company by SEC for the defendants’ involvement in unregistered broker activities, which was against the federal securities laws.
The SEC alleged that ICOBox and its owner conducted an illegal ICO offering of about $14 million digital tokens and processed as illegitimate brokers for the ICO offerings.
Basis of allegations
Last week, the SEC was granted a motion by the California court to submit the case against ICOBox and its owner. SEC alleged that Evdokimov and ICOBox mutually represented prejudgment interest and ill-gotten gains of $1,459,428.99, in addition to the $14,600,000 disgorgement claims. That makes it $16,059,429.99.
Based on the complaint by SEC, ICOBox raised funds in 2017 to develop a platform. During the fundraising, it rolled out an ICO offering which was unauthorized by SEC and other relevant regulatory bodies. The ICO illegally raised $14.6 million worth of ICO tokens from over 2,000 investors.
The SEC pointed out that since they did not go through the usual registration process, it denied investors and the public of the information regarding the company and its tokens. SEC alleged that as a result, the investors and traders did not have any means of measuring the company’s projections to assess their level of risk when investing.
Defendants prohibited from further engagements
Also, the company and its founder, as well as its affiliates, subsidiaries, attorneys, agents, employees, and officers are prohibited from making use of any instruments to sell a security. Any institution or member connected to the company is not allowed to roll out or offer security tokens through any medium.
The defendants are also prohibited from directly or indirectly floating any securities offerings unless they are registered with SEC and have done their dealings under the law.
They are also not allowed to stimulate or make any attempt to stimulate the sale or purchase of security via mails or any other means.
Since it did not register or associate with a registered broker, the defendants were strongly attracting and soliciting for the investors to buy the ICOBox securities in exchange for a transaction-based compensation.
As a result, the defendants are accused of involvement in unauthorized broker activities which goes contrary to the federal securities laws.