Summary
The Securities and Exchange Commission (SEC) has dropped charges against Digital Licensing Inc., also known as DEBT Box, after a federal judge threatened court sanctions against the SEC for presenting false evidence. The SEC has admitted its mistake and asked the judge to dismiss the action without prejudice. This allows the SEC to refile charges in the future. DEBT Box had previously asked the court to sanction the SEC and drop the case entirely, claiming significant damages from the restraining order. The SEC argues that additional sanctions would be too extreme.
Key Points
1. The Securities and Exchange Commission (SEC) dropped charges against Digital Licensing Inc., also known as DEBT Box, after facing the threat of court sanctions.
2. In November, a federal judge ordered SEC attorneys to explain why they should not be sanctioned for presenting false and misleading evidence in their attempt to obtain a temporary restraining order against DEBT Box and other defendants. The SEC was granted a TRO in August 2023 based on the evidence presented.
3. The SEC admitted its mistake and filed a brief stating that it would work to prevent such errors in the future. The agency asked the judge to accept a motion to dismiss the action without prejudice as the only penalty against the SEC. Dismissal without prejudice would allow the SEC to refile charges against the defendants in the future.