The United States Securities and Exchange Commission (SEC) has settled charges with two former officials of AriseBank, which has been slapped with a token sale fraud lawsuit early this year.
Jared Rice Sr. and Stanley Ford, AriseBank’s former CEO and COO respectively will pay a joint amount of $2.7 million in disgorgement and penalties, on top of $187,767 in penalties. Even though neither admitted nor denied the charges filed against them, both have conceded to perpetual bans from holding positions as officers and directors of public companies and from taking part in digital securities offerings.
More specifically, the pair is mandated to pay $2.26 million in disgorgement and $68,423 in prejudgment interest.
In addition, the two are permanently banned from violating antifraud and registration provisions according to federal securities laws.
In January, the SEC put a stop on Arisebank’s ICO and charged the company and the people behind it for allegedly committing fraud.
One day prior, the Texas Department of Banking released a different cease-and-desist order against the company. It underscored that the company did not have the authority to provide banking services in the state where it was headquartered.
The Federal Bureau of Investigation arrested Rice in late November after he was indicted on separate criminal charges of securities and wire fraud. Rice purportedly lied to investors regarding AriseBank’s authorizations, saying that the “first decentralized banking platform” was authorized to provide Federal Deposit Insurance Corporation (FDIC)-insured bank accounts, credit, and even debit cards via Visa and other services.
Unfortunately, the platform did not have like to the FDIC or Visa.