On March 3, District Judge Charles Pannell dismissed a lawsuit claiming securities fraud charges against rapper ‘T.I.’ for selling FLiK tokens for his company’s initial coin offering (ICO) during August 2017.
The judge failed to find concrete evidence of securities violations or negligent misrepresentation as T.I. made no claims regarding the value of the FLiK tokens:
“The plaintiffs have merely alleged that Harris encouraged his Twitter followers to visit the website for the FLiK ICO. They have not provided any statements from Harris about the value of the FLiK tokens. The facts as pleaded do not rise to the level of particularity required.”
Judge Pannell added that the plaintiffs had failed to demonstrate that T.I.’s actions constituted securities violations according to the Georgia Uniform Securities Act:
“The company is not physically located within the boundaries of the state of Georgia. None of the plaintiffs reside in Georgia or allege that they have traveled to Georgia, therefore the acceptances were executed outside of Georgia. The plaintiffs have not alleged that any funds were sent to or from any financial institutions or accounts located in Georgia.”
Albert Chapar, T.I.’s attorney, stated that they were “very pleased with Judge Pannell’s verdict.
T.I. sued for securities fraud in November 2018
The rapper, born Clifford Harris Jr., faced charges of state securities fraud, unjust enrichment, negligent misrepresentation, and punitive damages for selling tokens for his FLiK initial coin offering (ICO).
In November 2018, 25 FLiK investors sued the rapper and his business partner Ryan Felton for allegedly recruiting them into a pump and dump scheme.
The price of FLiK grew by 400 percent between August and October 2017 from $0.06 to $0.30 but fell 53% over the following three months to trade at $0.14. During April 2018, the company announced that it had missed the launch date for its platform, driving prices down to $0.08 by August 2018. The plaintiffs claimed to have lost more than $2 million collectively.
During May 2019, the plaintiffs filed an amended complaint to include entertainer Kevin Hart for promoting the ICO on social media. The court has yet to hear the claims made against Hart.
Steven Seagal charged for promoting ICO
Last week, the U.S. Securities and Exchange Commission (SEC) ordered actor Steven Seagal to pay $330,000 to the U.S. for failing to disclose that he was paid to promote the ‘Bitcoiin2Gen’ ICO in 2018.