The United State Securities and Exchange Commission announced that they obtained an order that banned and fined the founder of TomahawkCoin, David T. Laurance for organizing a fraudulent ICO.
Laurance and his company- Tomahawk Exploration LLC- claimed that the ICO was to fund oil drilling operations in California, while it knowingly providing erroneous and inflated data to trick the public into believing the company owned leases for drilling sites.
Laurance ‘s criminal record had a history of frauds related to securities offerings, information which was also revealed in the SEC’s press release.
“The SEC’s order finds that the defendants’ promotional materials used inflated projections of oil production that were contradicted by the company’s own internal analysis and misleadingly suggested that Tomahawk possessed leases for drilling sites when it did not.”
The document continues to read:
“…the materials described Laurance as having a “flawless background” without disclosing his prior criminal conviction for his role in fraudulent securities offerings. The order also finds that Tomahawk claimed that token owners would be able to convert the Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens. Although the ICO failed to raise money, Tomahawk issued tokens through a “Bounty Program” in exchange for online promotional services. “
The venture also claimed that investors can convert their crypto token holdings into profit from the oil production.
The Tomahawk founder conformed to the cease and desist order without acknowledging or negating fault to the accusations. The SEC also fined Laurance with$30,000, an officer and director ban, which rules out the possibility of serving as officer or director for any registered company, and a penny bar, which bans a person from participating in penny stock offerings.
The Chief of the SEC’s Cyber Unit, Robert A. Cohen, commented regarding the case, and gave some word of warning:
“Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs.”
