SEC slaps company with a $30,000 fine on ICO fraud, Founder behind bars

On August 14th, the Securities and Exchange Commission [SEC] acquired a permanent bar against the Founder David Thompson Laurance and his company Tomahawk Exploration LLC.

The order came into effect after investigations revealed that the company was responsible for fraudulent initial coin offerings [ICOs] to back oil analysis and excavation in the state of California.

The case was headed by the Chief of the SEC’s Cyber Unit, Robert A. Cohen and Steven Buchholz, member of the Cyber Unit.

According to SEC, the company tried to gain money through selling cryptocurrencies called “Tomahawkcoins” [TOM]. Also, promo materials used by the company portrayed increased oil production. Moreover, the same was in contradiction to the company’s own internal analysis, the report concluded.

Furthermore, SEC’s findings revealed that the stuff recovered from the company characterized Laurance as having a flawless background. Laurance was cleverly able to hide his earlier criminal conviction against deceitful securities offerings.

The company also claimed that crypto owners would be able to convert TOM into capital. In turn, profiting from the foreseen increased production of oil and secondary exchange of the tokens, the SEC further explained.

Cyber Chief Cohen alerted investors through his statement. He said:

“Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs.”

Based on the facts, the company had initially claimed to raise money through ICOs but was unable to. Despite this, the company went on to issue tokens through a “Bounty Program”, the SEC noted.

The SEC found the company guilty of the violation of the federal securities laws. Moreover, the company nodded in agreement to SEC’s findings and agreed to a cease and refrainment order. The founder also agreed to the officer and director bar, penny stock bar, and pay a penalty of $30,000.

Additionally, The SEC’s Office of Investor Education and Advocacy [OIEA] also made a parallel announcement on their official page urging investors to conduct a background check before indulging in trading activities. The notice also advised investors to use a tool that the SEC offered to verify the background of people offering such trade.