AriseBank CEO Jared Rice and COO Stanley Ford are being held liable for $2,259,543 in disgorgement plus another $68,423 in prejudgment interest. They also are liable to pay $184,767 worth of civil penalties each, and from this point forward they are prohibited from serving as officers of public companies or any business within digital securities.
These hefty fees come to us from an announcement made by the U.S. Securities Exchange Commission (SEC) on December 12, after they found that Arise Bank was operating a fraudulent ICO. After Rice was arrested by the FBI on November 28, the SEC found that Rice had claimed he could offer customers of the bank “FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services.”
The claims that AriseBank made, stating that it was a legitimate bank able to offer FDIC insured accounts and traditional banking services was a completely false statement. Rice did not have any access to FDIC insurance and no proof of partnership with Visa whatsoever. The funds that AriseBank made from investors was allegedly spent by Rice for personal purchases.