SEC slaps company for stock trading masked as fantasy game
Reprints
A New York-based company has agreed to pay a $50,000 penalty for illegally offering complex derivative products to retail investors through mobile phone games that were described as “fantasy sports for stocks,” the U.S. Securities and Exchange Commission said Thursday.
The SEC said New York-based Forcerank L.L.C. violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by failing to file a registration statement for what constituted a security-based swap offering, and for failing to sell the contracts through a national securities exchange.
The SEC said Forcerank ran mobile phone games where players predicted the order in which 10 securities would perform relative to each other, with players winning points and some receiving cash prizes based on their predictions’ accuracy.
Forcerank kept 10% of the entry fees and obtained a data set about market expectations that it hoped to sell to hedge funds and other investors, the SEC said in its statement. Players won points and some received cash prices based on their predictions’ accuracy.
Forcerank consented to the order without admitting or denying it had violated Dodd-Frank, the SEC said.
A Forcerank spokeswoman said that when the company was notified by the SEC of the problem in June, it immediately discontinued the paid portion of the competition. She said the company is still running the competition on an unpaid basis, which addresses the SEC’s concerns.
Read Next
-
Mobile app opens three routes of risk: on-duty, off-duty, cyber
Ride-sharing insurance for drivers working with San Francisco-based Uber Technologies Inc. is essentially divided into three parts.
Related Stories
Most Read in Risk Management
-
3. Zurich North America names professional liability, cyber leader
-
5. Chubb readies $350 million payout tied to Baltimore bridge collapse
