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In today's environment, the government has never more aggressively regulated, investigated, pursued and prosecuted white collar crime. If you or your company becomes embroiled in any type of federal or state government investigation, you need experienced trial lawyers who have gone toe-to-toe with prosecutors and government agents.

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    SEC Files Fraud Charges Against Founder of Bitcoin Store

    What Happened?
    At the end of June, the SEC filed fraud charges against Renwick Haddow, a U.K. Citizen and alleged founder of a Bitcoin platform and chain of shared office spaces, alleging his use of the United States as the base of operations to defraud investors out of $37.7 million.

    The Rundown
    The SEC filed its civil complaint in the Southern District of New York, alleging that Haddow – through the creation and use of sham companies – mislead investors into believing that the companies had ongoing operations and capable senior executives ready to take the helm.  The SEC contends that  the Bitcoin platform – named the Bitcoin Store – didn’t have any operations or gross sales.  The complaint also alleged that the supposed executives, in the SEC’s words, “do not appear to exist,” and approximately $5 million of the invested funds were not invested in operations as promised.  They were diverted to overseas banks in Mauritius and Morocco.  The complaint seeks several forms of relief including the return of the investors’ funds and injunctive relief barring Haddow from further violations of the Securities Exchange Act and related laws.

    In addition to filing the complaint, the SEC obtained an order granting an emergency freezing of the assets of Haddow and his companies.  Haddow also faces criminal charges in the Southern District of New York related to the alleged fraud.

    For the Record
    “As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability.  In reality, Haddow controlled the companies from behind the scenes and they were far from profitable,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.

    The Take-Home
    This case serves as another reminder of the SEC’s authority to protect the investing public through the use of civil actions seeking monetary penalties, injunctive relief, disgorgement of illegally-obtained funds, the freezing of assets through a number of statutes including the Securities Act of 1933 and Exchange Act of 1934.

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