Rapper and successful businessman Clifford “T.I.” Harris Jr. has been charged with helping to promote an “unregistered and fraudulent initial coin offerings (ICOs),” according to a press release from The Securities and Exchange Commission (SEC).
The SEC has announced charges against Harris, film producer Ryan Felton, and three other Atlanta-based people. They are each charged with promoting one of Felton’s two unregistered and fraudulent initial coin offerings (ICOs). FLiK and CoinSpark, the two companies controlled by Felton, was also charged by The SEC. Aside from Felton, all of the individuals have agreed to settlements to resolve the charges against them.
The SEC’s complaint has alleged that Felton promised to build a digital streaming platform for FLiK, and a digital asset trading platform for CoinSpark. Felton had allegedly misappropriated the funds raised in the ICOs and the complaint also alleges that Felton secretly transferred FLiK tokens to himself and sold them into the market. By doing so, he pulled in an additional $2.2 million in profits, and that he participated in manipulative trading to inflate the price of SPARK tokens. Felton then allegedly used the funds he misappropriated and the proceeds of his manipulative trading to buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury goods.
For T.I.’s involvement, the SEC concluded that T.I. offered and sold FLiK tokens on his social media accounts, falsely claiming to be a FLiK co-owner and encouraged his followers to invest in the FLiK ICO. T.I. also asked a celebrity friend to help promote the FLiK ICO on social media and provided the celebrity with verbiage for posts, stating that FLiK was T.I.’s “new venture.” It is also alledged that T.I.’s social media manager William Sparks, Jr. offered and sold FLiK tokens on T.I.’s social media accounts, and two other Atlanta residents, Chance White and Owen Smith, promoted SPARK tokens without disclosing they were promised compensation in return.
“The federal securities laws provide the same protections to investors in digital asset securities as they do to investors in more traditional forms of securities,” said Carolyn M. Welshhans, Associate Director in the Division of Enforcement. “As alleged in the SEC’s complaint, Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading.”
The SEC’s order against T.I. requires him to pay a $75,000 civil penalty and he is no longer allowed to participate in offerings or sales of digital-asset securities for at least five years.
The U.S. Attorney’s Office for the Northern District of Georgia brought criminal charges against Felton in a parallel action.
Disclosure : Anunlimitedamountofmoney.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.
Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, We will receive an affiliate commission at no extra cost to you. Please read our disclosure for more info.