Securities Commissioner Travis J. Iles has filed an Emergency Cease and Desist Order against Darrell Porter, a minister from Killeen, Texas, and Eric Ture Muhammad, a self-proclaimed “Wealth Minister” from Fairburn, Georgia. The order alleges that Porter and Muhammad engaged in illegal and fraudulent investment offerings related to digital asset arbitrage trading, which promised substantial returns on principal investments.
The order claims that investments with a principal of 10,000 USDT could generate returns of 3,600 USDT per month or 43,800 USDT after one year. These digital asset arbitrage trading investments were purportedly issued by Trage Technologies Limited, an offshore company based in the Republic of the Marshall Islands.
According to the allegations, Trage Technologies failed to disclose crucial information regarding its principals’ qualifications and is believed to be operating through an illegal multilevel marketing program that compensates agents with “dividends.”
Commissioner Iles stated, “On one hand, bad actors are leveraging widespread interest in cutting-edge technology to develop fraudulent schemes. On the other hand, bad actors are using multilevel marketing and other traditional sales practices to quickly and efficiently pitch the cutting-edge products to clients. Taken together, the modern and traditional tactics combine to greatly increase the threat to retail investors.”
The order further alleges that Trage Technologies, along with Porter and Muhammad, falsely claimed the firm was registered with the United States Securities and Exchange Commission (SEC). However, the order specifies that neither Trage Technologies nor its securities are registered with the agency. Instead, the company allegedly misrepresented that it met the criteria under Regulation D, Rule 506(c), which allows for unregistered securities sales to accredited investors.
Joe Rotunda, the TSSB Enforcement Director, clarified that “Regulation D is essentially the opposite of registration,” emphasizing that sales made under Rule 506(c) are inherently of unregistered securities. He noted that issuers may receive safe harbor under this rule only when they limit sales to accredited investors.
The order asserts that Trage Technologies does not qualify for safe harbor under Regulation D, Rule 506(c), as it has failed to restrict sales to accredited investors and has not taken adequate steps to verify their accreditation. “In other words,” added Rotunda, “Trage is accused of not only falsely claiming it is registered with the US SEC but also of falsely claiming it qualifies for safe harbor treatment pursuant to a rule promulgated by the US SEC.”
According to the order, Porter and Muhammad are multilevel marketers that previously promoted products on behalf of various other companies. These companies allegedly include GSB Gold Standard Bank LTD dba GS Partners, a firm named as a respondent in Order No. ENF-23-CDO-1879. According to the order, Muhammad has also been promoting products issued by Billionico Academy, an organization named as a respondent in Order No. ENF-23-CDO-1882.
Porter is also head of the Sunday School Department at the Agape Church of God in Christ in Killeen, Texas.
The parties are afforded 31 days to challenge the order.
