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Declaring its jurisdiction and authority in the issue, the U.S. Securities and Exchange Commission (SEC) has angrily rejected Richard Heart’s request to dismiss its $1 billion securities action. Claiming he lived overseas and had no direct links to the United States throughout the relevant time, Heart, creator of Hex (HEX) and known by his true name, Richard Schueler claimed the SEC lacked jurisdiction over him.
The SEC responded in a reply dated August 22 that Heart had aggressively targeted U.S. investors using a variety of promotional activities, including an in-person interview in Miami and virtual visits to U.S.-based conferences. Emphasizing HEX, PulseChain (PLS), and PulseX (PLSX), all of which the SEC regards as unregistered securities, the SEC’s complaint focused on Heart’s operations directed especially toward U.S. investors.
The SEC also maintained its allegation that Heart used millions of dollars obtained from investors to finance personal luxury expenditures like watches, luxury automobiles, and the “largest black diamond in the world.” The regulator believed that by selling unregistered securities, Heart’s activities violated federal securities regulations.
Heart’s move to dismiss also claimed that because the SEC’s complaint included comments made on the blockchain and in promotional material, his free speech rights were violated. The SEC turned down this allegation, likening it to a bank robber claiming his rights were violated by mentioning him as saying “stick ’em up.”
The matter is set for a hearing on October 24 when both sides will further make their cases.
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