SEC Issues Charges to Several Defendants for Unregistered Securities Sales
- posted: Nov. 11, 2019
- Whistleblower Litigation, Fraud
The U.S. Securities and Exchange Commission (SEC) charged Crystal World Holdings, Inc., The New Sports Economy Institute and Christopher Paul Rabalais for misleading its investors in an unregistered offer and sale of Crystal World Holdings securities to domestic and international investors.
Case background
According to the SEC complaint, Rabalais and his two companies listed as defendants in the suit took in more than $1.5 million from investors between 2014 and 2019 by mischaracterizing the stock in Crystal World as gifts that would be offered in exchange for donations to The New Sports Economy Institute. The Institute is a nonprofit entity founded by Rabalais.
During the fundraising period, Rabalais and his companies allegedly misled investors on purpose by promising that the Crystal World stock would soon be officially registered with the SEC, and routinely emphasized the importance of purchasing that stock before it became more valuable as a result of that registration. However, Rabalais never took any material efforts to register the stock, and was in fact not even aware of how to achieve that registration.
The original complaint was filed in the U.S. District Court for the District of Columbia. The SEC is seeking interest, injunctions, disgorgement and civil monetary penalties.
Companies are required to comply with all SEC and other federal rules regarding the offering and sale of stock and securities. Failure to do so could result in those companies being cited and penalized for noncompliance, and potentially even being charged with crimes, opening up the potential for prison time.
For more information about how you can provide information to the SEC regarding securities violations so you can hold companies accountable for their fraud and other forms of wrongdoing, contact an experienced attorney at Kardell Law Group.
