John O'Rourke (right) CEO of Riot Blockchain after a shareholders meeting in Oklahoma City on May 9, 2018.

Riot BlockChain CEO John O’Rourke out in wake of unrelated SEC charges

The CEO and chairman of Riot BlockChain has resigned in the wake of unrelated charges by the U.S. Securities and Exchange Commission (SEC) in opposition to him for alleged fraud in connection with other companies.

Florida investor who was as soon as Riot’s largest shareholder, was additionally named in the SEC criticism.

The SEC introduced on Friday charges in opposition to a bunch of 10 people and their related entities for long-running fraudulent schemes that introduced in greater than $27 million.

The SEC known as these charged “microcap fraudsters” in a press launch.

“Honig was the primary strategist, calling upon other Defendants to buy or sell stock, arrange for the issuance of shares, negotiate transactions, or engage in promotional activity,” in line with the SEC criticism.

“In each scheme, Honig orchestrated his and his associates’ acquisition of a large quantity of the issuer’s stock at steep discounts, either by acquiring a shell and executing a reverse merger or by participating in financings on terms highly unfavorable to the company,” it added.

The SEC introduced the motion for “three highly profitable ‘pump-and-dump’ schemes perpetrated by Honig, [John] Stetson, [Michael] Brauser, O’Rourke, [Mark] Groussman, and [Phillip] Frost, and their entities,” the criticism alleged. Frost is a well known biotech investor and based Opko Health.

CNBC reached out to all these named in the criticism, however Groussman declined to remark whereas the opposite defendants weren’t instantly accessible. The SEC additionally alleges the defendants organized and paid for inventory promotion.

“Honig then directed O’Rourke to write a promotional article, which O’Rourke published under the pseudonym ‘Wall Street Advisors’ on Seeking Alpha,” the criticism stated. “[O’Rourke] also knowingly and falsely claimed ‘not receiving compensation'” for writing the article.

In one other occasion cited by the SEC, John Ford, additionally a defendant, allegedly did not disclose in an article selling a inventory that he had been compensated by Honig for writing the article, with Honig promoting him below-market shares.

Riot Blockchain is a cryptocurrency firm whose inventory worth skyrocketed after it modified its title.

Riot’s inventory was down greater than 24 p.c in after-market buying and selling on the information.

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