Jason Gottlieb Represents Initial Coin Offering Issuers in First Enforcement Target of SEC’s Cyber Unit

January 8, 2018 – Morrison Cohen Partner Jason Gottlieb is quoted in defense of PlexCoin's initial coin offering (ICO) – the first enforcement target of the Securities and Exchange Commission's new Cyber Unit – in an article that appeared on the front page of the December 22, 2017 issue of the New York Law Journal (“Morrison Cohen, Stepping in for PlexCoin, Takes Swipe at SEC”).

In a cutting-edge case that is being closely watched by companies contemplating ICOs, Jason argued, in a letter filed in advance of a forthcoming motion to dismiss, that the “SEC has engaged in a tremendous overreach, toward persons who are not subject to personal jurisdiction in this judicial district, and toward transactions that are excluded from regulation under U.S. federal securities laws.”

Jason was further quoted saying that “[e]ven assuming for this motion that the transactions at issue in the complaint were transactions in securities – which will be a major area of dispute – the SEC pleads no facts that suggest the transactions were domestic transactions as required under the Supreme Court's landmark Morrison decision,” which held that U.S. federal securities laws apply only to transactions on U.S. securities exchanges and “domestic transactions in other securities.”

The SEC's Cyber Unit, created in September 2017 to build on its Enforcement Division's ongoing efforts to address cyber-based threats and protect retail investors, alleges that the PlexCoin's tokens were unregistered securities and that claims about their potential value were based on false statements.