Hawaii Man Charged for Making False Security Fund Conversion to Crypto Claims

Hawaii Man Charged for Making False Security Fund Conversion to Crypto Claims – The U.S. Securities and Exchange Commission (SEC) has filed charges against a Hawaiian resident named Jeremy Koski, accusing him of falsely presenting a security and circulating deceptive materials, claiming it would be the inaugural publicly traded security fund transitioning into a cryptocurrency. The Commission alleges that Koski promoted this security with the intent of inflating its price and enhancing his portfolio’s value. 

The SEC also accused Koski of falsely claiming that the conversion would “allow the fund to recover the face value of $25 as it opens up to a new world of digitized currency.” According to the Commission’s Sept. 1 press release, the SEC has since formally charged Koski with “violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.” The SEC said it is seeking a permanent injunction against future violations. 

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Detailing Koski’s fraudulent actions, the SEC asserted that the Hawaiian resident had orchestrated his scheme by leveraging internet message boards and multiple usernames to promote forged documents. The Commission contended that Koski’s primary objective extended beyond simply inflating the price of the security identified by the symbol COTRP; he also aimed to enhance the overall value of his investment portfolio.

To substantiate these allegations, the SEC cited an incident in May 2021 when Koski posted a notice claiming that the JCP debentures would be redeemed early at their full value. As a result of this statement, the price of the security experienced a substantial surge, increasing by 75%. The SEC further contended that Koski was fully cognizant of the falsehoods contained in his statements, implying a deliberate intent to deceive and manipulate the market.

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