The U.S. Securities and Exchange Commission has charged a Hawaiian resident for falsely claiming that his fraudulent security would become the “first publicly traded security fund to convert to a cryptocurrency.” According to the Commission, the man promoted the security to boost its price and bolster the value of his portfolio.
Fabricated Documents Used to Perpetrate the Fraud
The U.S. Securities and Exchange Commission (SEC) has charged a Hawaiian resident Jeremy Koski for allegedly fabricating and posting fake documents about a purported security that he said would become the “first publicly traded security fund to convert to a cryptocurrency.” The SEC also accused Koski of falsely claiming that the conversion would “allow the fund to recover the face value of $25 as it opens up to a new world of digitized currency.”
According to the Commission’s Sept. 1 press release, the SEC has since formally charged Koski with “violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.” The SEC said it is seeking a permanent injunction against future violations.
Explaining how Koski perpetrated the fraud, the SEC alleged that the Hawaii resident had used internet message boards and different usernames to promote the fake documents. Koski’s objective according to the Commission was to not only boost the price of the security that used the symbol COTRP but bolster the value of his portfolio.
To support these allegations, the SEC claimed that after Koski posted a notice in May 2021 stating that the “JCP debentures would be redeemed early at their full value,” the price of the security went up by 75%. According to the SEC, Koski was aware that his statements were false.
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