The U.S. Securities and Exchange Commission (SEC) has settled charges with two former executives of AriseBank, which was hit with a token sale fraud lawsuit in early 2018.
Former AriseBank CEO Jared Rice Sr. and former COO Stanley Ford will pay a combined $2.7 million in disgorgement and penalties, as well as $187,767 each in penalties. While neither admitted or denied the charges, both have also agreed to lifetime bans from serving as officers or directors of public companies and from participating in digital securities offerings.
Specifically, the two will pay $2.26 million in disgorgement and $68,423 in prejudgement interest.
Moreover, both are permanently prohibited from violating antifraud and registration provisions of federal securities laws.
AriseBank’s ICO was halted by the SEC in January of this year, which sued the company and the individuals behind it for allegedly committing fraud.
The Texas Department of Banking issued a separate cease-and-desist order against the company a day earlier, noting that the company was not authorized to provide banking services in the state, where it was based.
Rice was arrested late last month by the FBI after being indicted on separate criminal charges of securities and wire fraud. He allegedly lied to investors about AriseBank’s authorizations, claiming the “first decentralized banking platform” could offer Federal Deposit Insurance Corporation (FDIC)-insured bank accounts, credit and debit cards through Visa and other services.
However, the platform reportedly has no relationship with the FDIC or Visa.
SEC image via Shutterstock