The Arkansas Securities Department has issued a cease and desist order against an online asset trading platform, instructing the company to stop selling unregistered securities in Arkansas.
Issued on Oct. 21, the order states that legalbitcoinmining.com (LBM), an online company that is based in San Diego, Calif., has violated multiple provision of the Arkansas Securities Act. According to the Arkansas Department of Securities, LBM was offering securities that were not registered with the department or covered securities under federal law. In addition, the company was not registered with the department while attempting to operate as a broker-dealer and as an investment adviser in the state.
An Arkansas resident was reportedly contacted by an individual using the name of Noelle Trimble, who represented themselves as a senior account manager with the company. Trimble encouraged the Arkansas resident to invest through the online platform, guaranteeing returns of investment. Trimble promised that a $350 investment would yield $8,850; a $450 investment would yield $9,700; a $500 investment would yield $10,700; a $1,000 investment would yield $18,700; and a $2,000 investment would yield $24,700.
The Arkansas resident reported the exchange to the Securities Department, which conducted an investigation, finding that Trimble was a “fictitious online persona created and utilized by LBM to solicit investors over the internet.”
For promising guarantee investment returns, the Arkansas Securities Department stated that LBM violated state law by making false and misleading statements. In addition, the department cites the company’s claim of being the “world’s best mobile trading platform” and using “supposed investor testimonials while omitting to provide material facts to support the profits” as evidence of false and misleading statements.
Under the cease and desist order, LBM is compelled to stop acting as a broker-dealer and investment adviser until properly registered (or show an exemption) by the state, and to stop offering or selling securities unless they are properly registered. The company is also ordered to cease committing fraud or deception related to sales of securities.
“Con artists, like LBM, will take all measures to defraud investors. Never make an investment decision without understanding what you are investing in, who you are doing business with, and how your money will be used,” Commissioner Eric Munson said in a statement. “Always ask if the agent, business, and the security are registered with the Arkansas Securities Department.”
A hearing can be requested by LBM within 30 days of the order’s release. However, is the hearing is not requested, the cease and desist order will remain in effect.