Federal Court Rules in Favor of SEC Against Keith Crews
In a notable ruling, a federal court in Georgia has granted the U.S. Securities and Exchange Commission (SEC) a judgment exceeding $1.1 million against Keith Crews, a figure implicated in a cryptocurrency scam. Crews did not contest the lawsuit filed by the SEC in August 2023, leading Judge Tiffany Johnson to issue a default judgment on June 3.
Details of the Ruling
This ruling holds Crews accountable for disgorging over $530,000 from illicit gains, alongside a civil penalty of an equal amount and nearly $51,000 in prejudgment interest. Additionally, the court has instituted a permanent injunction against Crews, preventing any future violations of securities regulations.
SEC’s Allegations Against Crews
The SEC’s allegations assert that between October 2019 and May 2021, Crews operated a fraudulent scheme through his businesses, Four Square Biz and Stem Biotech. The agency claims he misled around 200 investors into contributing at least $800,000 by promoting a supposed cryptocurrency called “Stemy Coin”, which he falsely represented as being supported by legitimate stem cell technology and tangible assets, including gold. Notably, outreach efforts targeted the African-American and church communities.
The SEC contended that Crews made deceptive assertions about having operational labs, a line of health products, and a proven history of stem cell therapies, while in actuality, his companies lacked the necessary technologies and partnerships. It was outlined in their complaint that Crews had no verifiable connections to any research entities or assets necessary to back his claims.
Significance of the Judgment
This judgment marks a significant win for the SEC, particularly in the context of its broader regulatory activities as it scales back on numerous crypto enforcements that had been prevalent during the previous administration.
