A New York lawyer agreed to the entry of a Rule 102(e) SEC Administrative Order suspending her from appearing or practicing before the SEC Commission as an attorney.
In its administrative proceeding, the SEC alleged that from August 2017 through 2018, the New York attorney held herself out as a lawyer to prospective investors in a digital- asset securities offering and created an attorney trust account in which the investor offering proceeds were deposited.
In January 2020, the SEC brought an enforcement action against the New York attorney in federal court. Thereafter, in June 2023, the federal court entered an order that permanently enjoined her, by consent, from committing future violations of certain provisions of the federal securities laws, to wit: Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as Sections 17(a) and 5(a) and 5(c) of Securities Act of 1933.
The SEC’s lawsuit claimed that the lawyer defendant, along with others, perpetrated an unregistered, fraudulent digital asset securities offering spanning from approximately August 2017 through September 2018. As alleged in the SEC Complaint, the lawyer defendant, along with a recidivist, and other individuals, raised around $30 million in investor capital by making material misrepresentations to investors concerning, inter alia, the recidivist’s identity and his criminal past.
In late March 2023, the New York lawyer defendant pled guilty to criminal charges, to wit: conspiracy to commit wire fraud (18 U.S.C. §§ 1343, 1349); wire fraud (18 U.S.C. § 1343), and securities fraud (15 U.S.C. §§ 78(j)(b) and 78(ff); 17 C.F.R § 140.10b-5, 18 U.S.C. § 2) in Federal Court. The criminal indictment charged her with conspiring with another to financially enrich themselves by misrepresenting and omitting material facts regarding their backgrounds (both personal and professional), their respective roles in numerous businesses, and the utility of the products these businesses were allegedly developing.
Based upon the alleged conduct described above, the Commission deemed it appropriate and in the interest of the public to impose the sanction to which the New York lawyer agreed – that she be immediately suspended from appearing or practicing before the SEC Commission as an attorney pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice.
While this SEC sanction is likely the least of her current problems, for those lawyers and accountants who regularly appear and practice before the SEC, a Rule 102(e) Order can have devastating reputational and financial consequences, as well as collateral implications for continuing licensure before state bar associations and/or accountant regulatory bodies. I have represented both lawyers and accountants in Rule 102(e) cases over the years.
David Chase, Esq. is a former SEC Enforcement lawyer and now SEC defense attorney who represents those who have just received an SEC Subpoena or are under SEC investigation. David has over thirty (30) years of SEC experience and is principal of the Law Firm of David R. Chase, a SEC defense law firm. You can speak with David toll-free at: 800-760-0912 or e-mail at: david@davidchaselaw.com, and you can visit the Firm’s website for more information and content at: www.securitiesfrauddefense.com.
