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In an announcement published on their website on October 22, 2018, the United States Securities and Exchange Commission (SEC) said that it is suspending trading in the securities of American Retail Group, Inc. (ARGB), also known as Simex Inc, over making false cryptocurrency-related claims.
Company’s Crypto Claims Draw SEC Scrutiny
The U.S. Securities and Trading Commission (SEC) has suspended the trading of shares for a company which claimed to be offering an initial coin offering (ICO) that was registered with the regulator.
In an announcement published on their website on October 22, 2018, the SEC said it had suspended trading in the American Retail Group, otherwise known as Simex, Inc. after the company claimed in August that it was partnering with a qualified custodian to support cryptocurrency transactions.
The SEC explains the temporary suspension is imposed under Section 12(k) of the Securities Exchange Act of 1934. It commences at 9:30 a.m. EDT on October 22, 2018, and terminates at 11:59 p.m. EDT on November 2, 2018.
The company has reportedly conducted a token sale, claiming it was “officially registered in accordance with SEC requirements.” None of the company’s claims are accurate, the SEC said in the statement, with the Enforcement Division Cyber Unit’s chief, Robert Cohen, adding in that “the SEC does not endorse or qualify custodians for the cryptocurrency.”
SEC Warns Investors to Use Vigilance, Continues Streak of Shutting Down Trading Due to False Claims
In the SEC statement, Cohen said that investors should “use vigilance when considering an investment in an initial coin offering.” Under the federal securities laws, the SEC can suspend trading in a stock for ten days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until specific reporting requirements are met.
The temporary ban on American Retail Group isn’t the first time that the US regulator has halted trading in securities of companies involved in cryptocurrency-related activities. Back in April 2018, the SEC announced a temporary suspension of trading in the securities of IBITX Software Inc. (IBXS), a New York-based corporation.
On October 11, the agency obtained an emergency court order against BlockVest and its proprietor, Reginald Buddy Ringgold, after it used the SEC’s seal to indicate its ICO was registered with the regulator. The order also halted ongoing pre-ICO sales by the company, which was accused of using the SEC seal without permission, a violation of federal law, and falsely claiming their crypto fund was ‘licensed and regulated.