BOSTON, Dec. 3, 2024 /PRNewswire/ — “Staff from the Division of Enforcement (“Staff”) of the Securities and Exchange Commission (“SEC”) notified Christopher Frick and Brandon Frick, two of the individuals involved in the creation and development of the Pepe memecoin (“Pepe Development Team”), that the Staff intends to recommend a civil action involving the Pepe memecoin.  The October 22, 2024 “Wells Notice” from the Staff does not explain the basis for concluding why the Pepe memecoin allegedly constitutes a “security” under the SEC’s jurisdiction.  Based on the Wells Notice, the potential enforcement action appears to relate to allegations involving: not having registered the initial release of the Pepe memecoin in April 2023 under the Securities Act of 1933; and the transfer of approximately 4% of Pepe tokens to certain members of the Pepe Development Team in August 2023 in connection with a website disclosure that allegedly violated the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.  The potential civil action may seek injunctive relief, disgorgement, and civil monetary penalties.

Christopher Frick and Brandon Frick continue to deny any wrongdoing and dispute the SEC’s untested claim that the Pepe memecoin is a security. Receipt of a Wells Notice does not mean that the SEC Commissioners have determined that any securities laws have been violated, nor does it confirm that an enforcement action will be filed.  If the SEC initiates an enforcement action, the Fricks stand ready to defend themselves vigorously.”

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SOURCE ML Strategies on behalf of Chris and Brandon Frick