- The SEC filed for a subpoena enforcement against perpetrators of a pump and dump scheme
- The company had alleged back in January that it had “AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology.”
- According to the SEC, they have been non-compliant since the beginning of the investigation
The initial subpoena application was filed on the 5th of October at the U.S. District Court for the Central District of California and made mention of “Saint James Holding and Investment Company Trust and its sole trustee, Jeffre Jame.”, the perpetrators of the scheme.
Pump and Dump a big problem in crypto
Pumping and dumping are one of the most frustrating aspects of investing in cryptocurrency. It involves owners of a currency deliberately buying a large number of their own currencies in order to artificially drive up the price.
When the price goes up, they then re-sell the currencies to investors at inflated prices only for the value of the currency to crash.
In February 2018, an incident occurred where “Cherubim Interests, Inc.”, a penny-stock firm had its operations suspended by the SEC.
The reason for this was that the firm has made false and grandiose public statements including a purported “executed a $100,000,000 financing commitment” for an ICO for St James Trust. The filing stated:
“After Cherubim’s stock price and trading volume increased on this news, certain individuals associated with the company may have ‘dumped’ their overvalued Cherubim stock for significant profits.”
The activities that alerted the SEC to the firm’s alleged dubious activities dates back to the beginning of 2018. In January, a memorandum of understanding (MoU) was created which outlines Cherubim’s plans for an ICO financing commitment which was to involve a Self Sustaining Intentional Communities Coin (SJT).
Cherubim also released a press release in January claiming they had “AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology.”
This caused the SEC to have doubts concerning the validity of these claims and eventually issue a suspension order.
Further aggravating the situation was the fact that the firm did not file reports for the fiscal year ending August 2017.
To their credit, the SEC says that they have given multiple deadline extensions for compliance but that management of the company has not responded or provided the requested documentation.