Debt Fund Counts SEC Farewell Bid, Defines Its Strategic Identity
Software firm DebtBox is asking a Utah federal judge to dismiss a controversial US Securities and Exchange Commission (SEC) enforcement action against it.
In the year On February 14, Debt Box described the SEC's action as a strategic move to avoid potential sanctions and permanent dismissal for alleged misconduct.
On January 30, the SEC filed its motion to dismiss the lawsuit against Debt Fund, citing evidence in the case and reasons why its attorneys initially made misrepresentations to the court.
However, DebtBox argued that the SEC's willingness to dismiss the case without prejudice was a strategic move to avoid sanctions and possibly an enhanced enforcement action for misconduct.
“The SEC wants to withdraw on its own terms, retaining the option to refile another enforcement action against the Debt Box defendants and other defendants at some unspecified time and possibly in a different forum. But in this case, something happened.”
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Debt Fund says the SEC's move to dismiss is an attempt to get separate treatment from entities regulated by federal courts. It shows the SEC's dissatisfaction with promises to restructure teams or provide more ethics training when businesses are accused of misleading investors.
The filing comes after the SEC discovered in late December 2023 that it had made false statements to the court in the case. Judge Robert Shelby has previously criticized SEC lawyers and ordered the agency to explain “false or misleading” statements that the firm wanted to move assets offshore to avoid regulatory jurisdiction.
However, Shelby found that the SEC misrepresented the situation. In response to the court order, the supervisor changed his legal representation and decided to undergo internal training and requested a temporary dismissal for internal evaluation.
Debt Box also requested that the March 7 hearing continue as scheduled despite the SEC's request for cancellation.
Early in the lawsuit against DebtBox and its promoters, the SEC found the software company defrauded investors of at least $50 million by selling unregistered securities for software that purported to extract digital assets linked to real estate. – World industries.
The SEC won a temporary restraining order on Aug. 3, 2023, to freeze the debt fund's assets, saying the firm would destroy evidence and covertly transfer assets overseas if the order were to be lifted.
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