In a bid to protect consumers from false companies purporting to trade in stock the US Securities Exchange Commission (SEC) has suspended trading in American Retail Group Inc. In its defense, SEC refers to two earlier press releases from American Retail Group Inc. (OTC: ARBG).
In the two press releases, the Nevada based firm claimed it’s working in collaboration with SEC qualified custodian hence its cryptocurrency products are under the purview of SEC regulations. Furthermore, American Retail Group Inc. claimed its token offering is registered and in line with requirements from SEC. According to SEC, all these claims are false hence SEC issued the suspension.
Fraudulent Claims are on the Rise
Meanwhile early this month the CFTC took Kim Hecroft and Morgan Hunt to court for forging documents and impersonating its personnel. It’s unclear if the defendants are two people or it’s just one person using an alias. It is believed that the two are operating two businesses by the names of First Options Trading and Diamond Trading Investment. Through the firms, they called clients and deceived them to paying tax to the CFTC to receive their funds. To achieve all these Hunt forged, CFTC official seals and had an impersonator in place to act as a CFTC official during phone conversations. The case is filed in the US District Court in Northern District of Texas.
The ARBG suspension comes after two departments working under SEC issued an investor warning alert. The offices were CFTC’s Office of Customer Education and SEC’s Office of Investor Education. In the investor warning, SEC raised concerns about the misuse of its official seals on marketing materials online. Furthermore, the alert clearly states that personnel from its agency don’t have the power to endorse any service, products or investment options. The warning was issued early this month.
Apart from this recent warning SEC has issued similar investor warning regarding OTC companies. In particular SEC in 2014 issued a similar investor warning which was raising concerns about OTC firms in the marijuana industry. In the same manner, the firms were making false claims in their press releases. Under the OTC sector firms are not required to reveal a lot of information compared to their counterparts listed as securities exchanges.
In its legal mandate, SEC can suspend trading in stock until its requirements are met or issue a suspension of ten days until.