What has happened?

The SEC alleges that Florida residents Robert Dunlap, 48, and his 39-year-old girlfriend Nicole Bowdler worked with 55-year-old Schmidt to market and sell a purported digital asset called 'Meta 1 Coin' in an unregistered securities offering conducted through the Meta 1 Coin Trust.

What does this mean?

It is alleged the defendants made a number of false and misleading statements to potential and actual investors in the U.S. and internationally, including claims that Meta 1 Coin was backed by a $1 billion art collection and/or $2 billion of gold and that accounting firm KPMG was auditing the gold assets.

According to the SEC press release, the defendants allegedly told investors that Meta 1 Coin was "risk-free, would never lose value and could return up to 224,923%". But the defendants never distributed the Meta 1 Coins and instead used investor funds to pay for personal expenses and to funnel proceeds to Pramana Capital Inc and Peter Shamoun.

The complaint states:

"The defendants enticed investors with the allure of a cryptocurrency, but the securities offering is nothing but a vehicle to steal investors’ money."

The defendants allegedly raised over $4.3 million from more than 150 investors and spent some of those funds to buy luxury cars, including a $215,000 Ferrari.

The SEC is charging the defendants with violating anti-fraud and securities registration provisions of the federal securities laws and is seeking permanent and conduct-based injunctions, disgorgement of the ill-gotten gains with prejudgment interest and civil penalties.

The complaint also charges Pramana and Shamoun as relief defendants and seeks disgorgement of allegedly ill-gotten gains with prejudgment interest.

Next steps

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