BALTIMORE, MD—Maryland Attorney General Brian E. Frosh on Wednesday announced that the Securities Division has issued a Final Order against La Tanya Davis of Silver Spring, Andrea King-Chang of Owings Mills, and their company, Ether Investment and Trading Group, LLC (together EITG) for violations of the Maryland Securities Act in connection with their involvement in a fraudulent offering of unregistered Initial Coin Offering (ICO) securities. The Final Order bars Davis, King-Chang, and their company from the securities and investment advisory industry and imposes fines jointly and individually totaling $140,000.
Using social media and its website www.ethertradecoin.io, EITG announced its intention to launch an ICO for a digital asset, Ethercoin, and published and distributed a white paper describing the Ethercoin business model and plans for the ICO. EITG used these and other offering and promotional materials to solicit investors in the United States and abroad, by among other things, making promises of triple returns to early “seed capital” investors.
In the white paper, EITG claimed that Ethercoin was developed by a group of cryptocurrency enthusiasts who recognized the need for a cryptocurrency that has low volatility and is backed by a tangible asset, in this case real estate. The Ethercoin team supposedly comprised hedge fund traders and developers with over 30 years of combined investing and trading experience across global financial markets.
“Investment opportunities that are difficult to research or determine value or risk, are a red flag,” said Attorney General Frosh. “Before handing over your hard-earned money, check with our Securities Division to verify the status of an investment or promoter. Get rich quick schemes are often a quick way to lose your money.”
According to the Final Order, which contains Findings of Fact and Conclusions of Law, EITG, Davis, and King-Chang violated the antifraud provisions of Maryland securities law by, among other things, failing to disclose material information relating to the offering, including disclosures related to the repayment of invested funds, profitability, risk, use of invested funds, and that the investments were being offered and sold in violation of applicable laws through unregistered agents.
As with other Final Orders, the Respondents have the right to appeal the order within 30 days to the circuit court.