Initial Coin Offering and Oil
The founder of a company that allegedly perpetrated a fraudulent initial coin offering to fund oil exploration and drilling in California has received permanent officer-and-director and penny stock bars.
According to a Securities and Exchange Commission order, David T. Laurance and Tomahawk Exploration LLC attempted to raise money through the sale of blockchain-based digital tokens called “Tomahawkcoins.”
The SEC’s order said that the defendants’ promotional materials used inflated projections of oil. The company’s own internal analysis contradicted these projections. Additionally, Tomahawk misled prospective investors by suggesting that Tomahawk possessed leases for drilling sites, when in fact it did not.
According to the order, the marketing materials described Laurance as having a “flawless background.” However, Laurance did not disclose his past criminal conviction for his role in fraudulent securities offerings.
Furthermore, the order said that Tomahawk claimed token owners would be able to convert the Tomahawkcoins into equity. Therefore, investors would be able to potentially profit from the anticipated oil production and secondary trading of the tokens.
