UK Citizen Moves To Be Released From Novel SECAction
By Brian Dowling
Law360 (February 3, 2025, 3:34 PM EST) -- A former cryptocurrency chief executive in the United Kingdom facing civil fraud claims for his promotion of crypto projects has said the U.S. Securities and Exchange Commission tried to "overstep its bounds" by suing him in Massachusetts even though none of his alleged actions connect him to the state.
Manpreet Kohli, who is also facing criminal charges, said in a Friday filing the SEC failed to show he had the "minimum contacts" with Massachusetts required to establish specific jurisdiction for the government's claims that he offered and sold unregistered cryptocurrency to investors as securities.
Kohli, a resident of India and London, told U.S. District Judge Angel Kelley that the allegations are "bare-bones, at best."
"In short, the SEC pleads that Mr. Kohli bought and sold cryptocurrency and tweeted about it a few times — this is the extent of the complaint's allegations. Faced with the agency's threshold pleading requirements to establish jurisdiction, these allegations are inadequate," the motion to dismiss reads.
Kohli, the former chief executive of a $7.5 billion crypto-asset company, is fighting extradition from London to face related criminal charges that he and others conspired to manipulate the market for certain cryptocurrencies.
Kohli was among 18 individuals and crypto firms charged in October in what prosecutors at the time said was the first-ever criminal case over alleged market manipulation and wash trading in the cryptocurrency industry.
Taking aim at the SEC's complaint, Kohli said the lawsuit doesn't claim he bought or sold to U.S. investors or even tried to, nor does it allege he made sales from the United States or entered the country to do so.
The closest thing the SEC offered tying him to Massachusetts is his status as chief financial officer of Saitama LLC, a company organized in Lawrence, Massachusetts, purportedly to formalize the management of one of the cryptocurrency projects, according to the motion.
The complaint doesn't claim Kohli participated in business deals, cryptocurrency token sales, or any other marketing or operations by Saitama LLC, he said. The SEC even concedes the LLC dissolved after less than a year and had little to do with issuing cryptocurrency tokens, according to the filing.
The allegation, Kohli argued in the motion, is too generic and bereft of meaning to "support the exercise of personal jurisdiction" in the case.
The commission also claims Kohli and other defendants promoted the cryptocurrency projects through social media and other platforms,
targeting the investing public, including investors in the U.S.
Kohli countered in the filing that such "vague and conclusory" allegations aren't enough to establish jurisdiction and are lacking because the SEC doesn't name investors who were the targets of such securities offerings.
Kohli's attorney, Eric S. Rosen of Dynamis LLP, told Law360 on Monday he and his client "strongly dispute" the conduct alleged in the complaint, adding it did not target U.S. investors.
"Because of this, we believe that the SEC has no jurisdiction over our client and the complaint should be dismissed," Rosen said.
A spokesperson for the SEC declined to comment when reached on Monday.
The SEC is represented by its own David J. D'Addio, Amy Harman Burkart, Jeffrey Cook and Joy Guo.
Manpreet Kohli is represented by Eric S. Rosen and Michael B. Homer of Dynamis LLP.
The case is Securities and Exchange Commission v. Armand et al., case number 1:24-cv-12586, in the U.S. District Court for the District of Massachusetts.
--Editing by Philip Shea.
All Content © 2003-2025, Portfolio Media, Inc.