RSE Markets Inc. Settles Charges with U.S. Securities Regulators
The U.S. Securities and Exchange Commission (SEC), on Wednesday, declared that it has settled charges against RSE Markets Inc., a company that operates the well-known collectibles website, RallyRd. The charges were related to operating as an unregistered exchange. The settled charges that RSE operated a platform that enabled U.S.-based retail investors to participate in buying and selling securities, without proper registration. Furthermore, it was also alleged that the company did not offer adequate safeguards and protections for investors.
The Settlement Timeline
The case against RSE Markets Inc. unfolded between two significant dates. The time period starts from July 1, 2018, and extends up to Nov. 20, 2021. It’s during this interval that the company was found to be operating its platform that indulged U.S.-based retail investors. However, these operations were carried out without the needful registration and did not offer any sort of investor protection.
The Consequence
In agreement with the settlement, RSE has consented to pay a civil penalty amounting to $350,000. Quite notably, this agreement has been achieved without the company acknowledging or disputing the SEC’s findings. Hence, the company has neither admitted to the charges levied by the regulators nor denied them.
Breaking Down the Allegations
The SEC’s allegations against RSE are two-fold:
- Operating as an unregistered exchange. Here, it’s suggested that the company was conducting securities transactions without being properly registered to do so. This goes against the regulations that have been put in place to ensure market transparency and integrity.
- Failing to provide proper investor protection. This accusation points to the company’s alleged lack of safeguards for the investment made by retail investors. Proper protection mechanisms are crucial in maintaining investor confidence and trust in market operations.
The Settlement
In light of the allegations brought forward by the SEC, the company agreed to a settlement. Consequently, it has been decided that the company would pay a civil penalty of $350,000.
| Event | Description |
|---|---|
| Allegations Made | July 1, 2018 – Nov 20, 2021 |
| Settlement Reached | Dec 1, 2021 |
| Penalty Amount | $350,000 |
However, this settlement does not mean an admission of guilt or a denial of the SEC’s allegations by the company. The SEC highlighted that RSE has agreed to pay the fine without either admitting or denying the regulators’ findings. Thus, the regulator’s statement implies that the company did not register its stand on the allegations while agreeing to the settlement.
Final Words
This event underscores the need for businesses, especially in the financial sector, to diligently observe market regulations and comply with necessary registration processes. Non-compliance can lead to serious allegations and hefty penalties, even if there is no direct admission or denial of the charges. Therefore, to avoid any compliance issues, proper registration and adherence to all operational requirements must be observed diligently.