- SEC charged two siblings John and JonAtina (Tina) Barksdale yesterday.
- They both were charged with defrauding thousands of retail investors.
- According to the SEC’s complaint, the Barksdales offered and sold Ormeus Coin to investors on cryptocurrency trading platforms from June 2017 to the present.
The Securities and Exchange Commission charged two siblings John and JonAtina (Tina) Barksdale yesterday with defrauding thousands of retail investors out of more than $124 million via two unregistered fraudulent securities offerings involving a digital token called “Ormeus Coin.”
According to the SEC’s complaint, the Barksdales offered and sold Ormeus Coin to investors on cryptocurrency trading platforms from June 2017 to the present. Furthermore, from June 2017 to April 2018, the Barksdales offered and sold subscription packages that included Ormeus Coin and an investment in a crypto trading programme through a multi-level marketing company called Ormeus Global.
According to the allegations, John Barksdale held roadshows around the world to promote the offerings. He and his sister, Tina, oversaw the creation of social media posts, YouTube videos, press releases, and other promotional materials.
According to the complaint, the defendants falsely claimed that Ormeus Coin was supported by one of the largest crypto mining operations in the world at the events, in the produced materials, and currently on Ormeus Coin’s website, despite the fact that they abandoned their mining operations in 2019 after generating less than $3 million in total mining revenue.
According to the allegations, the defendants falsely stated in many of these investor communications that Ormeus Coin had a $250 million crypto mining operation and was earning $5.4 million to $8 million per month in mining revenues.
According to the complaint, the Barksdales arranged for a public website to display a wallet of an unrelated third party showing more than $190 million in assets as of November 2021, despite the fact that the Ormeus wallets were worth less than $500,000. The Barksdales are also accused of manipulating the price of Ormeus Coin and misusing millions of dollars in investor funds for personal expenses, according to the complaint.
Melissa Hodgman, Associate Director in the SEC’s Division of Enforcement said that “We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit. We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public no matter what label the promoters apply to their products.”
The complaint, which was filed in the United States District Court for the Southern District of New York, accuses the Barksdales of violating federal securities laws and seeks injunctive relief, disgorgement plus interest, and civil penalties. In a related case, the United States Attorney’s Office for the Southern District of New York unsealed criminal charges against John Barksdale.
The SEC’s Office of Investor Education and Advocacy warns investors to be wary of potential cryptocurrency investment scams and to avoid investing based on social media. Matthew B. Reisig led the SEC’s investigation, which was overseen by Timothy England and Melissa Hodgman. The litigation will be led by Melissa Armstrong and Fred Block.