David T Laurance has been issued a USD 30,000 penalty from the US Securities and Exchange Commission (SEC) due to his connection with a fraudulent initial coin offering (ICO). He has also been barred from holding officer and director positions, or from trading in and owning penny stocks.
Laurance was the president and CEO of oil drilling company Tomahawk Exploration LLC, with whom he has been employed for eight years. Last year, he launched the ICO for the company’s new token, Tomahawkcoins, saying the funds raised would be used for oil exploration and drilling in California.
The SEC claims that the ICO provided false information during its promotion, including advertising inflated oil production projections and falsely claiming Tomahawk already held drilling permits for the sites in California. Additionally, Laurance was portrayed as an individual with a flawless background, when according to the SEC, he has been found guilty of involvement in deceitful security offerings prior to this conviction.
The ICO failed to raise the USD 5 million as planned but a bounty program was set up by the company to trade Tomahawkcoins for online promotional services. Laurance and Tomahawk have been issued cease and desist orders, while they chose to neither accept or deny the legitimacy of the claims.
The SEC used the opportunity to reissue a warning of scammers working with similar operations, with a press release for the case telling people to be wary of offers with unusually high returns on investment. A useful search tool provided by the SEC is Investor.gov that lists details of a variety of investment professionals.
Despite Laurance’s charges, a recent study indicates that ICOs account for under 2% of securities class action lawsuits. While any number is too high, it is at least beneficial for the industry that this number can be identified and made to face justice.
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