On February 7, 2024, the Northern District Court of Illinois issued final judgments on all claims against two CoinDeal backers, Arline Woodbury of Ridgewood, New Jersey, and Joyce Holverson of River Forest, Illinois.
The SEC complaint alleged that Woodbury and Holverson acted as back-end promoters for the CoinDeal scheme, through which investors were supposed to receive astronomical returns from the impending sale of an anonymous blockchain technology.
According to the complaint, Woodbury and Holverson created their own groups of investors to take advantage of the bonuses and payouts offered through CoinDeal. The complaint alleged that Woodbury and Holverson collected more than $3 million from hundreds of investors based on the dissemination of materially false and misleading statements about the deal and collectively embezzled hundreds of thousands of dollars of investment funds for personal use.
According to the complaint, no sale of CoinDeal ever took place and investors received no distribution.
Woodbury did not answer or otherwise respond to the SEC’s complaint. In a default judgment, the Court found that Woodbury violated the registration and anti-fraud provisions of Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and of Rule 10b-5 thereunder and aided and abetted violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder by the scheme’s alleged mastermind, Neil Chandran. In addition, the Court: (i) permanently enjoined Woodbury from future infringement; (ii) entered an officer and director bar against Woodbury; and (iii) ordered Woodbury to pay restitution of $199,151 plus prejudgment interest of $47,991 and a civil penalty of $230,464.
Without admitting or denying the SEC’s allegations, Holverson consented to the entry of a final judgment enjoining it from violating the registration and anti-fraud provisions of Sections 5 and 17(a) of the Securities Act and Sec. 10(b) of the Exchange Act Rule. 10b-5 below it. Holverson also agreed to enter an officer and director bar and pay restitution of $164,308 plus prejudgment interest of $25,778 and a civil penalty of $175,000.