The U.S. Securities and Exchange Commission (SEC) settled charges with two former executives involved in an allegedly fraudulent initial coin offering (ICO) earlier this year.
These executives have been ordered in federal court to pay nearly $2.7 million and are prohibited from serving as officers or directors of public companies or participating in future offerings of digital securities.
AriseBank’s then-CEO, Jared Rice Sr., and then-COO, Stanley Ford, were accused of offering and selling unregistered investments in their purported “AriseCoin” cryptocurrency by depicting AriseBank as a first-of-its-kind decentralized bank offering a variety of services to retail investors.
To settle these charges, Rice and Ford agreed to be held jointly and severally liable for $2,259,543 in disgorgement plus $68,423 in prejudgment interest, and each must pay a $184,767 penalty. They also agreed to lifetime bars from serving as officers and directors of public companies and participating in digital securities offerings, as well as permanent prohibitions against violating the antifraud and registration provisions of the federal securities laws.
Rice and Ford agreed to the settlements without admitting or denying the allegations in the SEC’s complaint.
Shamoil T. Shipchandler, director of the SEC’s Fort Worth Regional Office, commented:
Rice and Ford lied to AriseBank’s investors by pitching the company as a first-of-its kind decentralized bank offering its own cryptocurrency for customer products and services. The officer-and-director bar and digital securities offering bar will prevent Rice and Ford from engaging in another cryptoasset-based fraud.