SEC Charges John McAfee For Promoting Multiple ICOs
The U.S. Securities and Exchange Commission (SEC) charged Internet security expert and cryptocurrency enthusiast John McAfee for promoting investments in initial coin offerings (ICOs) to his Twitter followers without disclosing that he was paid to do so.
McAfee’s bodyguard, Jimmy Watson, Jr., was also charged for assisting him in the same role of fraudulently touting ICOs.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges McAfee and Watson with violating antifraud provisions of the federal securities laws. It also charges McAfee with violating the anti-touting provisions, and Watson with aiding and abetting McAfee’s violations.
According to the complaint, McAfee allegedly leveraged his fame to pretended to be impartial and independent while promoting at least seven ICOs, even though he was paid more than $23.1 million in digital assets for the promotions. However, McAffee had always denied receiving any compensation from the issuers.
The complaint alleges that McAfee made other false and misleading statements, such as claiming that he had personally invested in some of the ICOs and that he was advising certain issuers.
Watson also played a role of assisting McAfee by negotiating the promotion deals with the ICO issuers and helping McAfee cash out the digital asset payments for the promotions. Watson also made his then-spouse to tweet interest in one of the ICOs McAfee was promoting.
Watson was allegedly paid at least $316,000 for his role. McAfee and Watson profited, but investors were left holding digital assets that are now essentially worthless, the complaint says.
“McAfee, assisted by Watson, allegedly leveraged his fame to deceptively tout numerous digital asset securities to his followers without informing investors of his role as a paid promoter,” said Kristina Littman, Cyber Unit Chief.
The complaint seeks permanent injunctive relief, conduct-based injunctions, return of allegedly ill-gotten gains, and civil penalties. The SEC also seeks to bar McAfee from serving as a public company officer and director.
Simultaneously, the Tax Division of the Department of Justice (DoJ) also brought criminal charges against McAfee, who also founded the anti-virus software company McAfee Associates. He was indicted for tax evasion and willful failure to file tax returns, according to a DoJ statement.
The June 15 indictment was unsealed following McAfee’s arrest in Spain, where he is, pending extradition. McAfee had fled the United States in January 2019 as he was facing tax fraud charges by the country’s tax authorities. The 73-year-old tycoon, who openly defies US tax system, admits that he has not paid taxes for eight years.
Source: Read Full Article