SEC obtains Court judgment against Meta 1 Coin
The Securities and Exchange Commission (SEC) has obtained a final default judgment in its action against fraudulent crypto scheme Meta 1 Coin and a number of entities and individuals linked to it.
The SEC action targets Meta 1 Coin Trust (Meta1), Robert P. Dunlap, individually and d/b/a Clear International Trust, and Nicole Bowdler. The defendants failed to answer or to otherwise defend this action, and the District Clerk entered default against the defendants. Thereafter, the Court granted the Commission’s Motion for Default Final Judgment and Motion for Remedies and Entry of Final Judgment against Defendants.
Meta1 and Dunlap are liable, jointly and severally, for disgorgement of $10,849,776.47, representing net profits gained as a result of the conduct alleged in the SEC’s complaint, together with prejudgment interest thereon in the amount of $939,183.45, for a total of $11,788,959.92.
Further, Meta1 and Dunlap shall pay, on a joint and several basis, a civil penalty in the amount of $10,849,776.47 pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act.
Bowdler is liable for disgorgement in the amount of $1,540,679.48, together with prejudgment interest thereon of $133,365.03 for a total of $1,674,044.51, jointly and severally with Meta1 and Dunlap. Further, Bowdler shall pay a civil penalty of $1,540,679.48 pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act.
Defendants shall satisfy this obligation by paying $3,214,723.99 to the Securities and Exchange Commission within 30 days after the entry of the Final Judgment.
The defendants are also permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality to employ any device, scheme, or artifice to defraud.
From April 2018 through the present, the defendants have raised over $15.2 million from at least 800 investors in 40 states and eight foreign countries, through deceptive acts and materially false and misleading statements and omissions.
For example, Defendants have falsely stated that: (a) investors were, in fact, purchasing asset-backed digital coins; (b) Meta1 owned $1 billion in art insured against loss by a surety bond, and later, that Meta1 owned $2 billion [and now $8.8 billion] in gold assets; (c) KPMG was auditing Meta1’s gold assets; (d) Meta1 formed its own investment bank and developed its own digital currency exchange; (e) the Coin is safe and risk-free and will never lose value; (f) an initial public offering of the Coin (ICO) on its own exchange was imminent; and (g) each Coin, sold for either $22.22 or $44.44 would in two years be worth $50,000—up to a 224,923% return—as a “very conservative value.”
Defendants enticed investors with the allure of a cryptocurrency, but the securities offering is nothing but a vehicle to steal investors’ money. In reality, as Defendants knew each of the statements listed above was, and is, false.
And although Defendants assured investors that KPMG verified and affirmed Meta1’s gold valuations to bolster their claims that the Coin was safe and risk-free, those assurances were lies. KPMG never performed any audit services for Meta1, or anyone associated with Meta1 or any of the Defendants.
The SEC has warned that, despite many court orders and even an arrest warrant, Dunlap and Meta1 continue to operate and market the investment scheme through various means, including its website, social media, Zoom calls with investors and prospective investors, in-person seminars, and on an internet radio show.