2023-08-07 sec-litreleases litigation_release 65 KB 2,032 chars

SEC v. Justin Sun; Tron Foundation Limited; BitTorrent Foundation Ltd.; Rainberry, Inc.; Austin Mahone; and Deandre Cortez Way, No. LR-25803, Southern District of New York (Aug. 7, 2023) — Press Release

raw: Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., Austin Mahone, and Deandre Cortez Way

Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., Austin Mahone, and Deandre Cortez Way, No. 1:23-cv-02433 (S.D.N.Y. Aug. 7, 2023)

Caption
Securities and Exchange Commission v. Sun
Source PDF JSON
summary

The SEC obtained a consent judgment against celebrity Austin Mahone for illegally touting TRX and BTT crypto securities without disclosing his compensation.

paragraph

The SEC secured a final judgment against Austin Mahone for failing to disclose payments received for promoting Tronix (TRX) and BitTorrent (BTT). Mahone was ordered to pay $7,507 in disgorgement, $682 in prejudgment interest, and a $37,535 civil penalty. The judgment also imposes a three-year conduct-based injunction precluding any compensated touting of crypto asset securities.

narrative

The SEC obtained a final judgment resolving its action against Austin Mahone for illegally touting Tronix (TRX) and BitTorrent (BTT) without disclosing his compensation. This case is part of a broader enforcement action alleging that entrepreneur Justin Sun and his companies, including Tron Foundation Limited and BitTorrent Foundation Ltd., engaged in unregistered securities offerings and market manipulation via wash trading. The SEC further alleged that Sun orchestrated a campaign to pay celebrities, including Mahone and DeAndre Cortez Way, to promote these assets on social media. Under the consent judgment, Mahone is permanently enjoined from violating anti-touting provisions and is prohibited from compensated touting for three years. He must also pay $7,507 in disgorgement, $682 in prejudgment interest, and a $37,535 civil penalty. Litigation remains ongoing against Justin Sun, his associated companies, and DeAndre Cortez Way.

Enriched metadata

Scheme
crypto-securities (95%)
Court
Southern District of New York
Case No.
1:23-cv-02433
Outcome
charged · 2023-08-04
Civil penalty
$37,535
Entity
Justin Sun
Ticker
TRX,BTT
Classified crypto-securities(confidence 95%). EDGAR detection: forms 1-A/S-1/8-K· recall 43% / precision 2%. detection rule →
Statutes
Section 17(b) of the Securities Act
Parties
Securities and Exchange CommissionJustin SunBitTorrent Foundation Ltd.DeAndre Cortez WayTron Foundation LimitedAustin MahoneRainberry, Inc.
Keywords
deandre cortezfoundationsecuritiessuntron foundationfoundation limitedlimited bittorrentbittorrent foundationaustin mahonejustinbittorrentmahonesecmahone deandresecurities exchange

Exhibits & Attached Documents (1)

Extracted insights

Dollar amounts 3
  • $38K $37,535 $10K–$100K
  • $8K $7,507 <$10K
  • $682 $682 <$10K
Entities 8
  • person Adam B. Gottlieb
  • person Austin Mahone
  • person Deandre Cortez Way
  • person final judgment
  • person melissa armstrong
  • agency sec litigation against justin sun, his companies, and deandre cortez way
  • agency Securities and Exchange Commission
  • person Timothy Halloran
Triples 15
  • Securities And Exchange Commission Obtained Final Judgment on August 4, 2023 resolving its action against Austin Mahone
  • Securities And Exchange Commission Alleged Justin Sun engaged in unregistered offer and sale of TRX and BTT
  • Securities And Exchange Commission Alleged Justin Sun fraudulently manipulated secondary market for TRX and BTT
  • Securities And Exchange Commission Alleged Tron Foundation Limited engaged in unregistered offer and sale of TRX and BTT
  • Securities And Exchange Commission Alleged BitTorrent Foundation Ltd. engaged in unregistered offer and sale of TRX and BTT
  • Securities And Exchange Commission Alleged Rainberry Inc. engaged in unregistered offer and sale of TRX and BTT
  • Securities And Exchange Commission Alleged Justin Sun orchestrated campaign to pay Austin Mahone and DeAndre Cortez Way
  • Austin Mahone Promoted TRX and BTT on social media without disclosing payment
  • DeAndre Cortez Way Promoted TRX and BTT on social media without disclosing payment
  • Final Judgment Enjoined Austin Mahone from violating anti-touting provisions of Section 17(b) of the Securities Act of 1933
  • Final Judgment Imposed Three-year conduct-based injunction precluding compensated touting by Austin Mahone
  • Final Judgment Ordered Austin Mahone to pay $7,507 disgorgement, $682 prejudgment interest, and $37,535 civil penalty
  • Timothy Halloran Leads SEC litigation against Justin Sun, his companies, and DeAndre Cortez Way
  • Adam B. Gottlieb Leads SEC litigation against Justin Sun, his companies, and DeAndre Cortez Way
  • Melissa Armstrong Supervises SEC litigation against Justin Sun, his companies, and DeAndre Cortez Way
PDF (from attached: judgment)
Austin Mahone (“Defendant”) having entered a general appearance; consented to the Court’s · Source
Text layers
Extracted body text (2,032c) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25803 / August 7, 2023 Securities and Exchange Commission v. Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., Austin Mahone, and Deandre Cortez Way, No. 1:23-cv-02433 (S.D.N.Y. filed Mar. 22, 2023) SEC Obtains Consent Judgment Against Celebrity Charged with Illegally Touting Crypto Asset Securities for Crypto Entrepreneur Justin Sun On August 4, 2023, the Securities and Exchange Commission obtained a final judgment resolving the SEC’s action against defendant Austin Mahone, who the SEC previously charged with illegally touting crypto asset securities Tronix (TRX) and BitTorrent (BTT) without disclosing his compensation. The SEC’s complaint, filed March 22, 2023 in the United States District Court for the Southern District of New York, alleged that crypto entrepreneur Justin Sun and three of his wholly-owned companies—Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent)—engaged in the unregistered offer and sale of TRX and BTT, and fraudulently manipulated the secondary market for these securities through extensive wash trading. The SEC also alleged that Sun and his companies orchestrated a campaign to pay influential celebrities—including Mahone and codefendant DeAndre Cortez Way (a/k/a Soulja Boy)—to promote TRX and BTT on social media without disclosing the fact that they were being paid to do so. The final judgment, entered with Mahone’s consent, permanently enjoins him from violating the anti-touting provisions of Section 17(b) of the Securities Act of 1933, imposes a three-year conduct-based injunction precluding any compensated touting of crypto asset securities, and orders him to pay $7,507 disgorgement plus $682 prejudgment interest and a civil penalty of $37,535. The SEC’s ongoing litigation against Justin Sun, his companies, and DeAndre Cortez Way is being led by Timothy Halloran and Adam B. Gottlieb, under the supervision of Melissa Armstrong. Judgment
OCR text (2,032c · html-text · 99% conf) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25803 / August 7, 2023 Securities and Exchange Commission v. Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., Austin Mahone, and Deandre Cortez Way, No. 1:23-cv-02433 (S.D.N.Y. filed Mar. 22, 2023) SEC Obtains Consent Judgment Against Celebrity Charged with Illegally Touting Crypto Asset Securities for Crypto Entrepreneur Justin Sun On August 4, 2023, the Securities and Exchange Commission obtained a final judgment resolving the SEC’s action against defendant Austin Mahone, who the SEC previously charged with illegally touting crypto asset securities Tronix (TRX) and BitTorrent (BTT) without disclosing his compensation. The SEC’s complaint, filed March 22, 2023 in the United States District Court for the Southern District of New York, alleged that crypto entrepreneur Justin Sun and three of his wholly-owned companies—Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent)—engaged in the unregistered offer and sale of TRX and BTT, and fraudulently manipulated the secondary market for these securities through extensive wash trading. The SEC also alleged that Sun and his companies orchestrated a campaign to pay influential celebrities—including Mahone and codefendant DeAndre Cortez Way (a/k/a Soulja Boy)—to promote TRX and BTT on social media without disclosing the fact that they were being paid to do so. The final judgment, entered with Mahone’s consent, permanently enjoins him from violating the anti-touting provisions of Section 17(b) of the Securities Act of 1933, imposes a three-year conduct-based injunction precluding any compensated touting of crypto asset securities, and orders him to pay $7,507 disgorgement plus $682 prejudgment interest and a civil penalty of $37,535. The SEC’s ongoing litigation against Justin Sun, his companies, and DeAndre Cortez Way is being led by Timothy Halloran and Adam B. Gottlieb, under the supervision of Melissa Armstrong. Judgment

Related documents (1)