GTV, Saraca, and Voice of Guo media companies to pay $539M to settle SEC charges over illegal securities offerings

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SEC Order unregistered ICO

The Securities and Exchange Commission (SEC) announced that the three media companies facing charges for conducting illegal securities offerings agreed to settle.

GTV Media Group Inc., Saraca Media Group Inc., and Voice of Guo Media Inc agreed to pay more than $539 million to resolve the SEC allegations that they offered and sold unregistered digital coins and shares of common stock to investors.

Saraca is the parent company of GTV  (referred to as G Entities) and both companies are based in New York City, New York. Voice of Guo is based in Phoenix, Arizona and it provides support services including translation to the G Entities.

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SEC Order against the respondents

In the SEC Order,  the federal securities regulator alleged that the G Entities and Voice of Guo violated Sections 5(a) and 5(c) of the Securities Act by offering and selling unregistered digital coins and stocks, which are considered securities.

The respondents allegedly encouraged thousands of investors to invest in the GTV common stock offering and the G-Coins or G-Dollars coin offering from approximately April to June 2020.  They told investors that the coin offering is an investment opportunity that will likely generate significant returns based on the G Entities’ ability to develop an online platform that combines the power of citizen journalism, artificial intelligence, big data, social news, and blockchain technology.

The SEC found that the respondents collectively raised around $487 million from more than 5,000 investors in the United States and elsewhere.

The G Entities and Voice of Guo submitted a settlement offer in anticipation of the Commission’s action to start a proceeding against them.

The respondents agreed to the entry of the SEC Order requiring the respondents to pay more than $539 million.

Saraca and GTV agreed to pay disgorgement of more than  $434 million and prejudgment interest of approximately $16 million. They also agreed to pay civil penalties totaling $30 million or $15 million each.

Voice of Guo agreed to pay disgorgement of over $52 million and prejudgment interest of almost $2 million. The company also agreed to pay a civil penalty of $5 million.

Additionally, the SEC Order required the three media companies to stop violating the federal securities laws.

The G Entities and Voice of Guo agreed to the settlement without admitting or denying the SEC charges.

In a statement, SEc Enforcement Divison Deputy Director Sanjay Wadhwa said, “Issuers seeking to access the markets through a public securities offering must provide investors with the disclosures required under the federal securities laws. When they fail to do so, the Commission will seek remedies that make harmed investors whole, such as an unwinding of the offering and a return of the funds to the investors.”

On the other hand, SEC New York Regional Office Director Richard Best said, “Thousands of investors purchased GTV stock, G-Coins, and G-Dollars based on the respondents’ solicitation of the general public with limited disclosures. the remedies ordered by the Commission today, which include a fair fund distribution, will provide meaningful relief to investors in these illegal offerings.”

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