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Disguises, Fake Identities, and an Illegal ICO – The SEC Looks to Lay Charges

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Charges Laid

The SEC is hard at work ousting, and holding accountable, those in the world of blockchain that have breached securities laws.  Most recently, the SEC has turned their attention to an ICO hosted by a pair of companies operated by a duo of devious individuals.

The Companies
  • CG Blockchain Inc.
  • BCT Inc.

This pairing of companies was marketed as developing technology to disrupt hedge funds, and the way they operate.

The Ring Leaders
  • Boaz Manor (alias ‘Shaun Macdonald)
  • Edith Pardo (alias ‘Edith Mehler’)

In all endeavours, it is believed that Boaz Manor was at the helm, with Edith Pardo acting as a ‘front-woman’, deflecting attention from Manor’s past.

The Details

In this particular case, the pair of companies, and the aforementioned individuals, are accused of facilitating/hosting a ‘fraudulent and unregistered offering of digital asset securities’.

$30 million worth of these securities were sold to investors, under the guise of a utility token ‘BCT’.  Beyond simply selling illegal securities, those responsible flat out lied to their investors on a variety of fronts.

  • Fake Identities
  • Fake chain of command
  • Product state of development
  • Product Adoption
  • Investments by founders

The list goes on.  Simply put, they were not who they said they were, and the companies did not have a developed product gaining traction within the industry.

Fake Identity

This next bit is not an everyday occurrence – rather, it was something you would see in a movie.  Knowing full well that their activities were in violation of various securities based laws, Manor and Edith Pardo felt it prudent to hide their identities.

In order to do this, and distance themselves from their past activities (more on that, later), the pair went to great lengths.  The SEC states,

“During the scheme, Manor employed a number of deceptive devices related to his fake identity and to the concealment of his background and role.”

Some of the tactics used to conceal their identities included dying hair, growing beards, attaining fake identification under the alias ‘Shaun MacDonald’, etc.

Shady Past

There are few reasons to justify hiding one’s identity in the manner that Manor did – either you’ve done something bad, or are doing something bad.  In this particular case, Manor is guilty of both.

We’ve discussed the illegalities associated with his actions in the aforementioned ICO, however Manor has a history of such activity.  Dating back to 2005 in Canada, Manor was found to be running a fraudulent hedge fund, valued at nearly $750 million.

When light was shed upon his operation, Manor proceeded to flee the great white north, becoming a fugitive in the process.  After eventually returning, and completing a prison sentence of 1 year, Manor went on his way, staying out of the limelight until now.

Commentary

Due to the great lengths gone to by the pair to partake in the aforementioned illegal activities, in addition to the sum of money raised, the SEC is taking a strong stance.  The following is an excerpt from their court filing.

“Unless Defendants are restrained and enjoined, they will again engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.”

SEC

The Securities and Exchange Commission is a United Stated based regulatory body, tasked with creating, an enforcing, regulation surrounding securities.  The goal of which is to foster and maintain a fair, transparent, and efficient market for all participants.

Chairman, Jay Clayton, currently oversees company operations.

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

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