The United States Securities and Exchange Commission (SEC) has charged Boaz Manor, a Canadian-convicted criminal, including two of his businesses, and a business associate, Edith Pardo, with conducting a fraudulent initial coin offering (ICO).
Through the businesses, CG Blockchain Inc. and BCT Inc. SEZC, Manor reportedly raised over $30 million from hundreds of investors between August 2017 and September 2018, by selling digital assets in an effort to develop technologies for hedge funds and investors in digital assets.
While Manor ran the businesses; he concealed his true Identity by darkening his hair, growing a beard, and using aliases to hide from Investors the fact that he had served in prison for a year after pleading guilty to criminal charges associated with the collapse of a Canadian hedge fund.
Although Manor revealed to some investors that he concealed his identity to prevent “the company being destroyed,” he positioned Edith Pardo as the owner of the two businesses, and served as her employee named “Shaun MacDonald.”
The regulator warns investors to verify individuals behind a venture first before entrusting their money to them, according to Chief of the SEC’s Market Abuse Unit, Joseph G. Sansone.
“As alleged in our complaint, Manor’s brazen scheme to conceal his identity and criminal history deprived investors of essential information and allowed defendants to take over $30 million from investors’ pockets,” Sansone added.
Manor alleged that the fundraise was to develop technologies for digital assets Investors and hedge funds. However, the SEC’s complaint noted that he only sent a prototype to several funds, which was not even used. In contrast, Manor claimed to have 20 hedge funds testing technology that uses ledger or blockchain.
Both Manor and Pardo were charged with violating the anti-fraud and securities registration provisions of the federal securities laws and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.
The regulator also seeks orders to bar the defendants from participating in securities offerings in the future and acting as officers or directors of any public company.