The U.S. Securities and Exchange Commission (SEC) has settled with Veritaseum Inc. The SEC has been after the company for some time now, accusing it, and its founder Reginald Middleton of issuing a fraudulent ICO. The saga is now coming to an end, with Middleton and his company being ordered by the court to pay $9.5 million in fines.
The motion to settle was approved by Judge William Kunt of the New York District Court, a report by Finance Feeds revealed. However, it was an expected result since, as CoinGeek reported a month ago, Middleton and the SEC were already engaged in settlement talks.
The settlement requires Middleton and Veritaseum to fork out $7.9 million, representing certain profits that they are alleged to have gained from the ICO. They must also pay a prejudgment interest in the amount of $582,000. Middleton is liable for a civil penalty in the amount of $1 million.
The regulator will establish a Veritaseum Fair Fund where the collected disgorgement, prejudgment interest and civil penalties will be combined for distribution to the victims of the ICO as compensation. Holland & Knight LLP, a Florida-based law firm, was appointed as the distribution agent for the fund.
The judgment requires that all the Veritaseum accounts in entities such as Citibank, JPMorgan Chase and Gemini Trust Company be unfrozen and all their funds released within three days of being served with a copy of the final judgment. Middleton had tried to have his accounts unfrozen, filing a claim in court in August, but nothing came of it.
The judgment further prohibits Middleton from engaging “in the unregistered offer and sale of securities and committing fraud in connection with the offer,