SEC files injunction against digital currency executives who allegedly obtained investments on the basis of false representations

By Christine Duhaime | March 26th, 2020

The US Securities and Exchange Commission (the “SEC“) filed a complaint in Texas on March 16, 2020, against Robert Dunlap, Nicole Bowdler, the girlfriend of Dunlap, and a former Washington State Senator, David Schmidt, in connection with a digital currency they launched called Meta 1 coin (the “MetaCoin“) which raised US$4 million from the public.

According to the complaint, the defendants, or one or more of them, allegedly made material untrue statements to induce the public to invest in MetaCoin, including that KPMG was auditing MetaCoin.

Further, according to the complaint, the defendants used money from investors for a BMW and a Ferrari.

The defendants also set up, allegedly, a digital currency exchange. Specifically, the SEC alleges that the defendants:

  • sent out a newsletter representing that the MetaCoin would increase in value;
  • stated that they had a proven track record of success and “experts” on the team;
  • stated that the company was growing and hiring 200 people;
  • stated that the MetaCoin was backed by $2 billion in art and gold;
  • stated that the MetaCoin was secure and safe;
  • attempted to intimidate a person questioning the legitimacy of the MetaCoin;
  • on a radio program, stated that a person who spoke out against MetaCoin was an “absolute fraud” who was going to jail and who had fabricated information against MetaCoin and its owners;
  • stated that they consulted with the SEC who were impressed with the MetaCoin and bought some MetaCoin;
  • stated that they were “leading the way with KYC” compliance; and
  • stated that the public can’t lose money buying MetaCoin.

The SEC says that those statements were untrue, more specifically, the SEC says some were just lies. The defendants, when contacted by the SEC, cooperated to some extent and then ceased to be responsive.

On the surreal side, one of the defendants, Nicole Bowdler, stated that Abraham Lincoln came back from the dead and made revelations to her. On YouTube, she talks about how angels and Mother Earth also brought her back from another place, below. Dunlap appears at 0:46 in the below video to fix Bowdler’s iPhone.

According to the SEC complaint, the CEO worked from his home running the exchange and launching the ICO but he told investors that he worked from a business office.

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