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The U.S. Securities and Exchange Commission (SEC) recently charged two men alleged to have profited from illegal sales of stock of a company claiming to have a blockchain-related business. Although blockchain has waned in popularity as bitcoin has dropped, investors still must be wary of this new tech.

According to the SEC’s complaint, attorney T.J. Jesky and his law firm’s business affairs manager, Mark F. DeStefano, made roughly $1.4 million by selling shares in UBI Blockchain Internet Ltd. over a 10-day period from December 26, 2017, to January 5, 2018.

The sales stopped when the SEC temporarily suspended trading in UBI Blockchain stock earlier this year due to concerns about the accuracy of assertions in its SEC filings and unusual and unexplained market activity.

The SEC alleges that Jesky and DeStefano received 72,000 restricted shares of UBI Blockchain stock in October 2017 and were permitted to sell the shares at a fixed price of $3.70 per share under the registration statement. Instead, Jesky and DeStefano are alleged to have unlawfully sold the shares at much higher market prices, ranging from $21.12 to $48.40, when UBI Blockchain’s stock experienced an unusual price spike.

Without admitting or denying the allegations in the SEC’s complaint, Jesky and DeStefano agreed to return approximately $1.4 million of allegedly ill-gotten gains, pay $188,682 in penalties and be subject to permanent injunctions.

Robert A. Cohen, chief of the SEC Enforcement Division’s Cyber Unit, commented:

This case is a prime example of why the SEC has warned retail investors to be cautious before buying stock in companies that suddenly claim to have a blockchain business. This case involved both a trading suspension and people holding restricted shares who attempted to profit from the dramatic price increase with illegal stock sales that violated the registration statement.