A judge at the New York Eastern District Court has ordered the CEO of a blockchain firm Veritaseum LLC and New York-registered Veritaseum Inc., Reggie Middleton, to pay $8.4 million according to report from FinanceFeeds. He had been charged with securities fraud and is liable to face civil penalty of $1 million.
Middleton is one of a number of persons liable for the disgorgement of $7.8 million which was considered illegal profit. This and the prejudgment interest that amounts to $582.535 represent the amount that must be returned to investors by the defendants. The court has ordered that the defendants be barred from engaging in the sale of securities.
The case was first brought up by the United States Securities and Exchange Commission (SEC) in mid-August 2019 against Midddleton and his two companies after the regulator determined that he had they had sold securities without recourse to the agency.
In the document, the SEC alleged that the entities were responsible for an unregistered $14.8 million initial coin offering from late 2017 to 2018 and requested a U.S. District Court to freeze the defendants’ assets.
There have been settlement talks between the agency and the company since October 9. There reportedly rescheduling the initial conference at the New York Eastern District Court for Nov. 14, 2019. The company’s token has dropped about 37% from $24 to $15 per coin at press time, according to Coin360.