The SEC has issued a cease and desist order to Tomahawk Exploration for launching an allegedly fraudulent token sale and for failing to register securities.
The Securities and Exchange Commission (SEC) announced[1] it has issued a cease and desist order[2] to Tomahawk Exploration and its principal David Laurance. The order bars the company from continuing to offer its virtual coin, the Tomahawkcoin (TOM), and orders Laurance to cease offering penny stocks and pay a $30,000 fine.
The violations stem from a scheme to raise $5 million, purportedly for an oil exploration project in Kern County, California. The SEC order says that the company claimed its Tomahawkcoins were linked to equity in the company's oil leases, and that token holders would potentially be able to profit from selling the tokens on the secondary market. In other words, "TOM tokens are securities."
But Tomahawk failed to register these securities. This will come as no surprise to anyone who followed the Tomahawkcoin project. A year ago, the company announced[3] it was altering its plans specifically to skirt registration requirements. The company claimed that by ditching its plans to become a public company, it could avoid registration requirements and was "exempt from tough regulations imposed by the SEC."
The announcement even includes what appears to be a swipe at the regulatory body:
"SEC used to be a company that investigated fraud committed by Public companies, slowly the SEC has decided to become an entity that investigates companies for possible fraud. Yes,..we've come a long way, the SEC way."
Whatever exactly that means, it probably did not endear the company to the SEC.
It wasn't just lack of registration that got Tomahawk in trouble. It is also accused of fraud: Those oil leases that people
