SEC Crackdown On Three Companies Claiming Cryptocurrency Ties

February 16, 2018 8:49 PM

After finding problems with the way some companies have operated, the Securities and Exchange Commission (SEC) has halted over-the-counter trading of alternative construction company Cherubim Interests, telecom marketing firm PDX Partners, and the strategic acquisition and holding company, Victura Construction Group.

The SEC has said that questions remain about Cherubim, PDX, and Victura’s disclosure of quarterly reports, valuation of assets, and overall business practices. According to the SEC, releases from the companies claimed that they had “acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology among other things.” Cherubim had announced it was in the preliminary stages of an initial coin offering, with financing for the initiative underway.

The SEC has suspended trading of the stocks for these companies until March 2, 2018.

In press releases sent out to media between January 12-16, 2018, the companies reported to have received the amounts of $100,000,000 (acquired by Victura); $250,000,000 (acquired by Cheribum); and $350,000,000 (acquired by PDX), in the form of AAA-rated assets from NVC Fund LLC, a private equity investor firm.

Patrick Johnson is the CEO of all three companies. He issued this statement to shareholders of Cherubim, PDX, and Victura following the SEC order:

“The company has been notified by the Securities and Exchange Commission that the public interest and the protection of investors required a suspension of trading in the securities of the Company, respectively. Pursuant to Section 12(k) of the Securities Exchange Act of 1934, trading in the securities of the company has been suspended for the period from 9:30 a.m. EST, on February 16, 2018, through 11:59 p.m. EST, on March 2, 2018.”

The SEC’s director of the Los Angeles regional office, Michele Wein Layne, reminded consumers to be wary. “This is a reminder that investors should give heightened scrutiny to penny stock companies that have switched their focus to the latest business trend, such as cryptocurrency, blockchain technology, or initial coin offerings.” Johnson maintained that the three companies “will be complying with any regulatory inquiry during this period as requested.”

Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine. He is a full time staff writer for ETHNews and holds value in Ether.

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