Major Victory For iX Global Against SEC

The SEC in the USA has lost their case against iX Global and DEBT box as the SEC has presented false statements to the judge, with the objective to get a court order to close down iX Global and DEBT Box. The SEC is ordered to:

“The Commission (SEC) is ORDERED to pay Defendants’ and Receiver’s attorneys’ fees and legal costs arising from the TRO and the Receiver. Defendants and Receiver are ORDERED to file within 30 days petitions for fees clearly setting forth their requests in accordance with the court’s guidance in this order.”

In Summary:

Though the Commission had sufficient information to know its representations about account closures were false and misleading at the time it sought the ex parte TRO, Defendants put the Commission on notice of additional facts undermining these statements in their Motions to Dissolve.

For example, the DEBT Box Defendants highlighted, consistent with Zaki’s information, there were no account closures in July 2023 and then provided evidence demonstrating banks—not Defendants—were responsible for the account closures in 2021 and 2022.

Similarly, the iX Global Defendants provide evidence demonstrating the bank, not Defendants, was responsible for the June 2023 account closures the Commission prominently featured in its argument for irreparable harm.

It was in response to this evidence that the Commission, rather than squarely engaging with the facts Defendants presented and acknowledging its prior misstatement, offered its new misrepresentation which it purported to be “consistent” with its prior misrepresentation.

And, in so doing, criticized Defendants for “ignore[ing]” evidence and “instead cling[ing] to two lines from the TRO Hearing to claim that the SEC failed to establish irreparable harm.”

Thus, in its Opposition the Commission not only exacerbated its misconduct from the TRO hearing by seeking to affirm and reiterate the false statement it had previously made—a statement it knew was false from the time it made it and failed to correct—but it engaged in further misconduct by communicating an additional false and misleading statement to the court after being confronted with irrefutable evidence of its error.

While these layers of false statements compound how troubling the Commission’s misconduct is, they also demonstrate subjective bad faith.

By claiming the statement in the Opposition was consistent with the statement from the TRO hearing, but then offering a new unrelated representation, Welsh and the Commission demonstrate they knew they had misled the court and were attempting to obfuscate. As the Commission was preparing its Opposition to the Motions to Dissolve, Welsh knew his statement from the TRO hearing was incorrect. Rather than correcting the misstatement, he and the Commission attempted to subtly shift the language to gloss over and perpetuate the misconduct.

For the reasons provided, the court concludes the Commission engaged in bad faith conduct in seeking, obtaining, and defending the ex parte TRO, asset freeze, and appointment of a receiver.

The court imposes sanctions under its inherent authority for the Commission’s abuse of judicial process.

The Commission is ORDERED to pay Defendants’ and Receiver’s attorneys’ fees and legal costs arising from the TRO and the Receiver. Defendants and Receiver are ORDERED to file within 30 days petitions for fees clearly setting forth their requests in accordance with the court’s guidance in this order.

Separately, the Commission’s Motion to Dismiss 428 is DENIED without prejudice to be refiled in accordance with the District of Utah’s Local Rules.

The court cautions that it has not yet had occasion to evaluate the underlying merits of this action beyond whether the Commission’s representations in furtherance of obtaining and defending its ex parte TRO align with the facts presented.

This Order focuses exclusively on the Commission’s conduct and should not be construed as offering any views on the underlying merits of the case.

SO ORDERED this 18th day of March 2024.

About iX Global

iX Global is an educational and self development fintech platform that works on the philosophy of learning and earning. You can subscribe to the courses to learn financial skills to implement for yourself, and also earn money through the referral bonus structure that the company has put in place for its Brand Ambassadors.

iX members also become a part of a community that works together towards each other’s personal and financial goals. For more information, please visit www.ixglobal.us