Monday, June 17, 2024

SEC revokes license of firm for soliciting investments for app with ‘robot traders’

The Securities and Exchange Commission (SEC) has cancelled the corporate registration of Koen Solutions for illegally soliciting investments from the public for its app.

Image from the Facebook page of Koen Solutions

In an order dated November 28, the SEC Enforcement and Investor Protection Department (EIPD) noted that Koen Solutions has been inviting the public to invest in its app for a guaranteed daily income of 2.5% to 3%, or monthly income of 75% to 90%, depending on the “financial trading robots” that they choose to invest in.

The robots supposedly search for and trade cryptocurrencies that could bring stable profits to investors.

The SEC has issued an advisory against Koen Solutions as early as September 9, 2022, directing the group to stop soliciting investments from the public until it has secured the necessary license to do so.

However, the group continued to sell and offer investments to the public, claiming on social media that it has submitted the necessary documents for the application of a secondary license to the SEC.

“Considering that nowhere is it stated in its primary purpose that Koen Solutions OPC is authorized the engaged in the selling or offering for sale of securities to the public, the activity of Koen Solutions OPC, of selling, or offering for sale of investments is considered an ultra vires act, and therefore, constitutes serious misrepresentation,” the order read.

Citing the Supreme Court ruling on SEC vs. CJH Development Corporation, the EIPD noted that the sale and/or offer of securities without the requisite license necessarily operates as a fraud on investors.

“These false representations of lucrative return of investment within a short period of time effectively lures the public to invest their hard-earned money to their company,” the order read.

“The investment scheme appears to have the characteristics of a “Ponzi Scheme” which is defined as an investment fraud that involves the payment of purported returns to existing investors from funds contributed by the new investors.”

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