SEC obtains final judgment against AirBit Club promoter
The Securities and Exchange Commission (SEC) has obtained a final judgment against AirBit Club promoter Karina Chairez. The relevant order was signed by Judge Colleen McMahon of the New York Southern District Court on April 7, 2022.
The order is in line with the SEC’s proposal. Chairez is permanently restrained and enjoined from violating Section 15(a) of the Exchange Act [15 U.S.C § 78o(a)] by making use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any security, without being registered as a broker or dealer in accordance with Section 15(b) of the Exchange Act [ 15 U.S.C. § 78o(b)].
She is also liable for disgorgement of $75,981, representing net profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $9,619.94, for a total amount of $85,600.94.
The Court further imposed a civil penalty in the amount of $75,981 pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. The defendant must satisfy these obligations by paying $161,581.94 to the SEC within 30 days after entry of the final judgment.
Let’s recall that the SEC has charged Karina Chairez for acting as an unregistered broker. The SEC previously brought similar charges against two other high-level promoters of AirBit Club, which promised investors returns through a purported digital asset trading program and from the recruitment of others.
The SEC’s complaint, filed on December 15, 2021 with the New York Southern District Court, alleges that Chairez solicited investors for AirBit Club, including through social media platforms and in-person meetings, without registering with the Commission. According to the complaint, Chairez raised large sums from investors, positioned herself at the top of an extensive pyramid of AirBit investors, and received substantial compensation from AirBit for the sale of the securities.
The SEC’s complaint charges Chairez with violating the broker-dealer registration provision of Section 15(a) of the Securities Exchange Act of 1934 and seeks injunctive relief, disgorgement and prejudgment interest, and civil penalties.