SEC Accused of Fraud in VERI Token Case; Defendants Seek Vacated Judgment
On Friday, May 30, 2025, Reginald Middleton, Veritaseum, Inc., and Veritaseum, LLC filed a memo in the US District Court for the Eastern District of New York in support of their motion to vacate a final judgment against them. The defendants allege that the Securities and Exchange Commission (SEC) committed fraud upon the court during the proceedings that led to a judgment entered on October 31, 2019.
The memorandum, submitted by attorney Franklin Jason Seibert, argues that the SEC engaged in a calculated scheme intended to mislead the court. This misconduct, according to the defendants, was perpetrated by SEC officers Jorge G. Tenreiro and Victor Suthammanont, who allegedly misrepresented critical information regarding asset transfers related to the case.
The SEC had accused Middleton and his companies of raising approximately $14.8 million through unregistered sales of VERI Tokens, asserting violations of federal securities laws. The SEC’s claims included allegations of fraudulent misrepresentation and the dissipation of investor funds, which the defendants contest as unfounded.
In their request, the defendants assert that the SEC’s actions undermined judicial integrity, violating established legal standards that require the government to act honorably and avoid fraudulent schemes. The memorandum cites several instances where the SEC allegedly provided misleading information, particularly regarding the nature of asset transfers that were claimed to be personal but were, in fact, part of regular business operations.
The defendants argue that the SEC’s narrative was fabricated, which led to the freezing of their assets and ultimately coerced them into accepting a consent judgment. They contend that the SEC’s actions not only affected the outcome of the case but also materially compromised their ability to mount a proper defense.
The memo details a series of exchanges between Middleton’s counsel and the SEC, asserting that the SEC failed to disclose crucial information regarding procedural changes in their enforcement manual that impacted the defendants’ due process rights. The defendants further claim that the SEC threatened to issue subpoenas without proper justification and engaged in intimidation tactics against potential witnesses.
In the memorandum, the defendants seek to have the court vacate the previous judgment, return the frozen assets, and dismiss the allegations against them without prejudice. They also request that the court award reasonable attorney’s fees incurred since 2017 and propose an evidentiary hearing to explore the extent of the SEC’s alleged misconduct.
Please contact BlockTribune for access to a copy of this filing.
