The United States Securities and Exchange Commission, or SEC, has filed a proposed final court ruling on the completed Telegram Open Network project.
In a draft final judgment filed on June 25, the SEC asked the New York Southern District Court to order fines of several million dollars from several defendants related to the case.
"The defendants are jointly and severally liable for the $ 1,224,000,000 restitution," wrote the SEC in the proposed judgment. At the time of publication, the judgment was received by the court. Although the court has "reviewed and approved the form" of the proposed judgment, it is not yet final.
Telegram has agreed to pay back $ 1.2 billion to investors and SEC sanctions
On a total return of $ 1.2 billion, $ 1.19 billion is the amount that the defendants have paid as termination amounts or original contracts to repay investors. Meanwhile, Telegram Group is liable to a civil fine of $ 18.5 million. Payment is expected to be made within 30 days of the proposed judgment coming into force, the SEC wrote.
According to the document, Telegram agreed to pay the fine of $ 18.5 million in an agreement reached on June 11.
The amount of the penalty will go to the US government "for all purposes"
According to the proposed judgment, the SEC should send the funds paid in accordance with the judgment to the United States Treasury. The amount to be paid should be treated as "penalties paid to the government for any purpose," including any tax purpose, the SEC wrote.
In the proposed judgment, the SEC clarified that defendants can transmit payment electronically via the network of the automated clearing house or the Fedwire Funds service. The regulator said the payment can also be made directly from a bank account via Pay.gov via the SEC website as well as by certified check, cashier's check or US money.
Telegram will have 30 days to pay if judgment is accepted by court
In the event that the defendants do not send the amount within 30 days of the entry of the proposed judgment, the SEC may have the judgment of the Court enforced for restitution and civil penalty by traveling for civil contempt.
The SEC continued to explain that the defendants waive all rights to the funds:
"By paying the termination amounts (as this term is defined in section 1.1 of the" Gram Purchase Contracts "), or the restitution and civil penalty amounts to the Commission, the defendants waive all rights , legal and equitable title and title. no interest in these funds and no part of the funds will be returned to the defendants. "
US investors accounted for about $ 400 million of ION's $ 1.7 billion of TON
As noted earlier, US investors accounted for $ 424.5 million of the total $ 1.7 billion of Telegram's 2018 coin offering (ICO). Shortly after a court ruled that the GRAM Telegram were likely to represent unregistered securities, the CEO and founder of Telegram, Pavel Durov, suggested a plan reimbursement.
In early May, Durov reportedly said that US investors in TON would not be eligible for a 110% redemption option, but could only get 72% immediate repayment. In mid-May, a report indicated that the majority of investors had decided to exit the project with an immediate 72% repayment soon after TON's official announcement of the closure on May 12. Court May Accept Judgment, Lawyer Says.
Philip Moustakis, a lawyer with Seward & Kissel LLP and a former SEC lawyer, believes that the New York Southern District Court is likely to accept the proposed settlement. "It is extremely rare for a court to reject a draft judgment submitted by the SEC with the consent of the accused in a case," said Moustakis.
The lawyer also stressed that the disgorgement amount of $ 1.2 million should not be a surprise despite the fact that American investors have invested about $ 400 million. "Nothing prevents the SEC from establishing a fair fund for the benefit of all investors, including non-American investors, affected by violent behavior," noted Moustakis.
The lawyer continued:
"It was only after the court issued the injunction against Telegram that he raised the extraterritoriality argument and asked the court to limit the injunction so as not to apply to non-purchasers Americans. The court rejected the request, finding it to be inopportune and that the protective measures proposed by Telegram to prevent non-American buyers from reselling grams in the United States were essentially unenforceable. "
