FOLLOW US

Kik Interactive finally decided to settle its legal battle with the U.S. Securities and Exchange Commission (SEC) in connection with its $100 million unregistered initial coin offering (ICO) in 2017

The Canada-based owner and operator of a mobile messaging app called Kik Messenger agreed to pay a penalty of $5 million to the SEC to settle the case, according to the agreement on a proposed judgment for injunctive and monetary relief submitted to the court by both parties.

The agreement also prohibits Kik from future violations of federal securities law. Below is a text from the court filing.

 “The parties have reached agreement on a proposed judgment, and file herewith a Consent executed by Kik Interactive Inc. (Exhibit A) and a proposed Final Judgment (Exhibit B). The proposed Final Judgment, if approved by the Court, would permanently enjoin Kik from committing future violations of Section 5, pursuant to Section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b); impose a conduct-based injunction, as set forth in the proposed Final Judgment, under Section 21(d)(5) of the Securities Exchange Act of 1934, 15 U.S.C.§ 78u(d)(5); and require Kik to pay a penalty of $5 million, pursuant to Section 20(d) of theSecurities Act, 15 U.S.C. § 77t(d). The proposed Final Judgment would conclude this action,”

The proposed settlement still requires the approval of the presiding District Court Judge Alvin K. Hellerstein. If approved, it will end the year-long legal dispute between Kik and the SEC.

Kik  previously considered continuing its legal fight with the SEC

Last month, Judge Hellerstein ruled that the Canadian mobile messaging app operator violated Section 5 of the Securities Act.

At the time, Kik CEO Ted Livingston said he was disappointed by the court’s ruling and considering an appeal. He reiterated that hat “the public sale of Kin was that of a functional currency and not a sale of securities.”

Livingston also said, “We are obviously disappointed in this ruling. We are considering all of our options, including filing an appeal. To be clear, Kik has always supported the Commission’s goal of protecting investors, and we take compliance seriously.”

The proposed agreement to settle the case showed that Livingston changed his mind regarding an appeal.

----------------------------------------

Have a story you want USA Herald to cover? Submit a tip here and if we think it's newsworthy, we'll follow up on it.

Want to contribute a story? We also accept article submissions – check out our writer's guidelines here.