SEC & CFTC charge 1Broker and CEO Patrick Brunner with violating federal securities laws
The homepage for 1Broker.com has been replaced by this message from the FBI.
Image via 1Broker.com
Today the SEC and the Commodity Futures Trading Commission (CFTC) filed parallel charges against 1Broker.com, seizing their website and alleging a variety of crimes including money laundering, wirefraud, and operating as an unregistered broker/dealer of securities.Tweet this
The website for 1Broker.com has been seized by the FBI in conjunction with charges filed today by the United States The Securities and Exchange Commission against the platform and its CEO Patrick Brunner.
Per the SEC release, an undercover agent in the US was able to use the platform, registered in the Republic of the Marshall Islands, “successfully purchased several security-based swaps on 1Broker’s platform from the U.S. despite not meeting the discretionary investment thresholds required by the federal securities laws.”
The seizure of the site comes under civil forfeiture laws (18 U.S.C. § 981 and 982) and includes a fairly damning list of charges and violations including:
- Money laundering (18 U.S.C. § 1956)
- Wire fraud (18 U.S.C. § 1343)
- Willfully operating as an unregistered broker/dealer of securities (15 U.S.C. § 78ff)
- Wllfully operating as an unregistered futures commission merchant ( 7 U.S.C. § 13)
- Fraud and related activity in connection with computers (18 U.S.C. § 1030)
Beyond failing to ensure investors met discretionary investment thresholds, the SEC alleges that Brunner and 1Broker were not a registered national exchange, nor were properly register to deal security swaps.
While most exchanges are fully committed to KYC, in this scenario all you needed was a username, an email address, and some Bitcoin to fund an account.
“The SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions. International companies that transact with U.S. investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.”
If the SEC has their way, 1Broker will find themselves facing “permanent injunctions, disgorgement plus interest, and penalties.”
The Commodity Futures Trading Commission (CFTC) has also filed charges against 1Broker for essentially the same reasons.
If you’d like to file a complaint against 1Broker, there’s a special FBI 1Broker page with information on how to do that.
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