Riot Blockchain Inc. is a company well known as NASDAQ: Riot unit, officially focuses on cryptocurrency mining and exchange development. It reports today that the company has replaced the CEO of the firm acting according to the SEC charges on him which connected him to the accusation of committing a fraud of $27 million in a pump and dump scheme.
The Securities and Exchange Commission has charged ten individuals in a group for committing fraud which generated more than $27 million from illegal stocks and sales and is responsible for causing harm to the retailers and investors who remained with only stock that is worthless in virtual industry. According to the complaint lodged by SEC, it was a gathering of “microcap fraudsters” which was managed by Barry Honig, one of the former largest shareholders of Riot and allegedly included John O’Rourke, the company CEO.
As per the reports available from reliable sources, it brought attention to Honig allegedly buying large amounts of stock at discounted rates available and made him secure a substantial ownership interest in the group. This group was involved in promoting illegal activities and manipulating the trades for artificially pumping the stock prices to create an appearance of trading at active volumes. The complaint also said that then the group dumped all the shares which caused the reaping of millions of dollars that too at the expense of investors who had no idea about the unlawful scheme whatsoever.
Furthermore, the reports also suggest that Honing along with his associates was involved in unlawful market manipulation which promoted their financial interests where they could tap into some of the innocent investors in their trap. Moreover, they executed their plans by underestimating and destabilizing the market’s security that currently impose. The comments are by SEC’s Senior Associate Director in Division of Enforcement, Sanjay Wadhwa.
Wadhwa further commented that what the group missed in committing their fraud effortlessly was the persistent and relentless pursuit resolve of SEC regulations which believed in this focus and also offers punishment to the participants that are involved in microcap fraud schemes.
Riot announced last Saturday that the new CEO of the company is to be Chris Ensey to reconstruct the company’s senior executives. However, announcement failed to mention any charges that will be going up against the former CEO publically. It explained how Ensey expects to continue to pursue the exploration of Riot’s digital currency exchange under Coinsquare license. It will further expand the opportunities for cryptocurrency business as well as the digital assets. The announcement clearly stated John O’Rourke’s resignation, Chairman and CEO.
If anything, it isn’t the first time you might be hearing Riot’s name involved in legal actions or lawsuits as it isn’t the case. Earlier the company was presented with a class action lawsuit. As some of you would know, Riot was formerly known as Bioptix, Inc. until October last year. The company was involved primarily in the development of veterinary diagnostic tool specialization before it became associated with a new name and a new focus in the technology sector.
On October 4, the former company announced their change to Riot Blockchain and shifted their business to foster the investment needs for blockchain technologies. The lawsuit stated earlier included the accusations of artificially inflating the prices of Riot’s security tokens as a result of defendants’ omissions and false statements.
Do you think that this is the last time you will hear about Riot Blockchain and their controversies, especially when it comes to legal action and lawsuits? Or will it be a bumpy ride ahead for the company tokens as a result of these charges?