While BitConnect promoter Michael Noble settled the SEC’s fraud allegations against him in 2021, disgorgement, interest and civil penalty amounts remain disputed.

Seeking to finalize these amounts, the SEC filed a motion seeking monetary relief against Noble on September 16th.

As laid out in the SEC’s September 16th filed supporting memorandum;

From June 2017 through January 2018 Noble promoted, offered and sold securities in the form of investments in a so-called “lending program” offered by BitConnect.

He used testimonial-style videos advertising the purported merits of BitConnect, published videos on YouTube, sometimes multiple times a day, with a referral link to the BitConnect lending program, and succeeded in inducing at least 1,000
investors to invest in BitConnect.

In return, as the Complaint alleges, BitConnect paid Noble approximately $731,281 in the form of “referral fees” and “development fund[]” fees based on the investments he induced investors to make.

Noble did all this without being registered as a broker-dealer with the Commission and without any Commission registration for BitConnect’s securities offering, both of which the federal securities laws require.

Noble’s conduct violated Section 5 of the Securities Act of 1933 (the “Securities Act”) and Section 15(a) of the Securities Exchange Act of 1934.

Based on the Complaint’s allegations and the additional evidence submitted with this motion, the Court should order Noble to disgorge $731,281, with $293,703.36 in pre-judgment interest, and pay a civil penalty of $50,000.

Citing a previous case, the SEC argues Noble is “precluded” from disputing the disgorgement, interest and penalty amounts sought.

“When a defendant enters [into] a consent judgment with the Commission and agrees not to challenge the details of the Commission’s complaint, courts accept the allegations in the complaint to be true when deciding the Commission’s subsequent motion for monetary relief.” SEC v. Juno Mother Earth Asset Mgmt., L.L.C.

Noble has until October 18th to file a response to the SEC’s filing. After which the SEC will have time to file a reply.

Pending a court decision on the SEC’s motion for monetary relief against Noble, we’ll keep you posted.

 

Update 21st November 2024 – The court has scheduled an oral argument on the matter for November 26th.

 

Update 27th November 2024 – On November 26th the court advised it had received a letter from Michael Noble, requesting permission to appear at the scheduled oral argument hearing.

The court has allowed to Noble to appear in person. Pending consultation with the parties, the court will reschedule the pending oral argument hearing at a later date.