The Texas State Securities Board (TSSB) issued a cease and desist order Wednesday against on Mirror Trading International (MTI), Forexandbitcoin.com and four individuals involved in a multi-level marketing scam.
Out of the four individuals, Cornelius Johannes Steynberg is a resident of South Africa, while Micheal Aaron Cullison, Steve Herceg and Brian D Knott have US residential addresses.
In its charge sheet, TSSB is alleging first that MTI is perpetrating a multi-level marketing company that promises lucrative commissions to its marketers.
Registered in South Africa, MTI claims it has “recruited” 76,000 members from more than 170 countries. Only since March 1, 2020, MTI says it has recruited 22,500 members.
However, TSSB says MTI’s marketers are “illegally soliciting Texans to purchase fraudulent investments in the cryptocurrency and forex trading pool.”
The Texan regulator asserts that investments in the cryptocurrency and forex trading pool are “securities” as that term is defined in Section 4.A of the Securities Act.
The cease and desist order says the four respondents are not registered with the Securities Commissioner as dealers and agents at the time when the securities where offered to Texans.
Therefore, the respondents are engaged in fraud in connection with the sale of the securities.
TSSB also states that Forexandbitcoin.com, Cullision, Herceg and Knott are acting as multi-level marketers for MTI.
The four are accused of touting the profitability, of not only the investments, but the multi-level marketing program as well.
Meanwhile, TSSB also singles out Herceg for targeting Texans impacted by changes to the economy in the wake of COVID-19.
Herceg is encouraging Texans to “put their governmental assistance stimulus/COVID check to work” by purchasing the investments.
In April, the FBI issued a global warning advising people to be on the lookout for cryptocurrency-related scams.
Also, the TSSB is accusing Cullison, Herceg and Knott of failing to disclose to potential investors about their previous bankruptcy filings.
Cullison has filed for bankruptcy four times between 1999 and 2015. Knott has filed twice and Herceg once.
The order also flags MTI for issuing disclaimers that force investors to indemnify it as well as its associates.
Respondents have 31 days to appeal the decision. If there are no representations, the four will face a fine of up to $10,000 or imprisonment if they continue operating.
What do you think about MTI’s dealings? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.