SEC Investigation of GAW Miners Underway

Last updated on October 13th, 2017 at 06:23 pm

UPDATE 08/18/15

Coin Fire’s initial reporting of the SEC investigation has been publicly confirmed with the SEC issuing a public statement confirming an active investigation is underway.

As part of its investigation, the staff in the SEC’s Boston Regional Office served Garza with a subpoena requiring his testimony in July 2015. After agreeing to several extensions of his testimony date, Garza appeared at the Commission’s offices on August 12, 2015, but refused to provide any substantive testimony. The SEC’s application sought an order from the federal district court compelling Garza to provide testimony in response to the subpoena. The court endorsed an order granting the SEC’s application on August 17, 2015. – SEC Statement

Mr. Garza’s brother Carlos a key member of the company’s “sales team” was subpoenaed by the SEC and was not cooperative with the agency. Full details can be read at CoinDesk or via the SEC.gov website.


 

Coin Fire has been able to exclusively confirm that an “active” investigation of GAW Miners, Josh Garza, Paybase, Paycoin, and several other “operating names” for Mr. Garza is underway by the United States Securities and Exchange Commission.

Coin Fire has obtained over 1,000 pages of an investigation file from a confirmed Commission employee that also has a bombshell draft of a potential enforcement litigation action against the company. The documents given to Coin Fire editors contain several hundred references to deleted forum posts on the company owned-and-operated Hashtalk forums, emails from potential victims of securities fraud, news stories from various websites, numerous social media postings, a sealed subpoena demanding the IPs associated with certain accounts on a well-known site where Garza and potential sock puppets have operated, and several storyboards from videos uploaded by the embattled company that enforcement attorneys are stating contain many confirmations of potential wrongdoing.

The documents provided to Coin Fire are the raw investigation notes being used to decide whether an enforcement action against the company will take place. Many of the items inside the investigation jacket are outside of the standard scope of an SEC investigation.

The Commission is a bureau of the government dedicated to financial fraud or financial crimes as opposed to consumer fraud. While the documents contain allegations against the company from consumers of misappropriations or other potential fraud, the only sections highlighted or referenced in other locations of the document are sections containing specifics about the offering of illegal securities.

One of the cornerstones for the investigation and draft enforcement action is related to three statements Mr. Garza made online that the Commission feels qualified Mr. Garza’s sales as an illegal securities offering. Enforcement attorneys spent several weeks gathering data that Mr. Garza made several efforts to “scrub” from the Internet.

The first major statement that our editorial team has seen highlighted in these documents is a statement from Mr. Garza in August of 2014. Mr. Garza stated that a percentage of the profits for ZenPool came from “day trading.” The fact that he stated it was from day trading created a situation in which, according to various securities laws, makes it a security. This is the first major cornerstone that the SEC intends on using in a potential enforcement action.

Coin Fire is unable to give the other two statements at this time due to potentially compromising the security of the ongoing investigation; however, both statements made by Mr. Garza are large parts of the investigation.

The commission also detailed in a time-line style accounting the events running up to even more recent events, such as the failed “floor” from statements made by Mr. Garza, but later edited on the Hashtalk site and other cryptocurrency news sites.

Enforcement attorneys for the Commission also drafted reports for potential future litigation stating,

“[..] it is our belief that Mr. Garza has been systematically with the assistance of his employees and “moderation team” been removing large portions of potential evidence from his websites and employing the services of attorneys used to intimidate other sites to remove potential evidence from the public record.”

The jacket contains more than simply evidence of potential wrongdoing by the company. It also has extensive draft court documents that could later be filed against the company and principles of the company.

One document has information about Cantor Fitzgerald’s Stuart Fraser and his involvement with the ongoing saga. The document confirms that Mr. Fraser is involved as an investor (a statement which Coin Fire and many other sites have been unable to verify until this document) and shows that some unwanted SEC attention could be coming his way as well.

The commission jacket also contains extensive evidence archived by victims on the Internet and has draft documents seeking subpoenas in the future requesting copies of the relevant information provided by consumers and victims to certify them for potential future court use.

Other sections of the investigation jacket are relevant about more recent events with the launch of trading platforms or the purchase of trading platforms upon which the company allows customers to buy, sell, or trade Paycoin. The commission believes that direct market manipulation has also taken place.

As our editorial team and attorneys have sifted through the pages of the jacket, it has become more clear that Mr. Garza’s moves to both remove information from the Internet and restrict others from sharing information indicates that the agency has become more emboldened to seek further outside information.

Coin Fire is working diligently with our editorial team and legal team to decide which parts of the jacket can be shared without jeopardizing the investigation, our sources within the SEC, or potential third parties from destroying further evidence. We will be sharing these documents and information over the next several months in a series dedicated to this ongoing story as we are able to do so.

While the SEC has yet to file or begin any active enforcement actions against Mr. Garza or the associated companies, they have begun amassing potential evidence for those actions and are seeking further information from those in the public who feel they are a victim of securities fraud.

Our source shared the following information with our team stating,

Those who feel they are potential victim of securities fraud should immediately contact the Securities and Exchange Commission with as much relevant information they have. The proper website for doing so is:

http://www.sec.gov/complaint/tipscomplaint.shtml

While the act of reaching an investigation point can take several months or even potentially years, the more information the agency has of potential wrongdoing, the more resources can be dedicated to the investigation and potential enforcement.

This post and series is the result of the work of Leo, Mike, and Christina from the Coin Fire team.

Image provided by Scott S.

Coin Fire

Coin Fire is a cryptocurrency news site started on June 6th of 2014. The site focused on hard-hitting investigative stories. Coin Fire was acquired by 99Bitcoins on October 2015.

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71 Comments on "SEC Investigation of GAW Miners Underway"

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St4yInTh3D4rk
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St4yInTh3D4rk

You wanna stop spreadin shit… I have a good mind to DDos your fuckin website u tosser!

Thank You.
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Thank You.
Epic report. Awesome! As a side note about the condition of things in this sector…BEWARE: With self absorbed, dubious jerks like Theymos with his obvious conflicts of interests, and his gang of highly questionable associates all now censoring posts and even banning accounts where Theymos is an active moderator (at , and where he even owns and fully controls https://bitcointalk.org/index.php it’s painfully apparent that the dupes and suckers need some serious help and warnings from the likes of coinfire.cf,and plenty of other honorable media outlets. It’s past time to dump some jerks and ditch a couple of sites unless of… Read more »
BMGBMG
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BMGBMG

Capture bonding much gawtards? The SEC investigation is real and it’s already been proven. It’s funny to see all the xpy bagholders getting pissed because a vast majority of the crypto community knows it’s a scam. Your faithless leader with less than one year of college was a clown at the NAbtc conference who passed on speaking because of the 15 crypto pros in front of him actually build technology instead of just copying code.

jd
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jd

how has it been proven?

BMGBMG
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BMGBMG

What size are your clown shoes?

jd
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jd

answering a question with a question is pretty pointless. please provide actual proof.

BMGBMG
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BMGBMG

Look up above Einstein

Coinfire sux
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Coinfire sux

Fake. No credible source quoted. No credible document dump posted. This might as well just be fake shit copied to pastebin. Even “Leo the journalist” didn’t put his real name on the article.

Davila
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Davila
Its not credible whatsoever!! The SEC would never leak information to a two bit internet site. They would never divulge information about an ongoing investigation. Leaking information pertaining to an ongoing SEC investigation is against the law. The files they showed were a cut and past job from another complaint not pertaining to GAW. Coinfire is complete filth and purposefully attacked GAW and its investors. If proven that coinfire sold a bunch of coins prior to releasing their article with intent to buy back cheaper could be considered market manipulation. They purposefully hurt GAW and its investors on multiple exchanges.… Read more »
BMGBMG
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BMGBMG

They just admitted their is an investigation on the hashtak forums.

jd
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jd

Provide the link

CC
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CC

No they did not.. Prove me wrong by posting a link to it!

More Coinfire FUD.

Hash
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Hash

Take a look at their record

Coinfire reports BFL gets raided by FTC > Week later confirmed by FTC

Coinfire reports GAW lying about partnerships. Josh says “just wait a month” > Still no way to shop directly at Amazon/Target/Walmart

Coinfire reports Amazon TOS violation > no more Amazon search on paybase

Coinfire reports Stripe TOS violation > no more CC purchases

Coinfire reports impending SEC investigation > ???

This probably isn’t fake you gaw followers are just in denial

steve
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steve

LOL ITS AMAZING WHAT IMPACT PAYCOIN IS HAVING AROUND THE WORLD. OF COURSE THIS IS FAKE EVRY SENSIBLE PERSON KNOWS ITS A BIG SMEAR CAMPAIGN TO TRY AAND DESTROY IT AS ITS A THREAT TO THE BITCOIN INDUSTRY. IT MAKES ME LAUGH ALL THIS, SO MANY NEW COINS COME AND GO THAT YOU NEVER PROB NEVER HEARD OF BUT PAYCOIN EVERYONE HAS HEARD OF, AND THATS BECAUSE ITS A MASSIVE THREAT TO ALL OTHER DIGITAL CURRENCIES THAT WE KNOW OF NOW.

Pumper
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Pumper

Can i join your pump and dump? Seriously, ill pay good coin next time you guys do this. email me.

bitcoinzar
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bitcoinzar

So publish the papers already :)

bitwin_co
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bitwin_co

Fake!!!

wpDiscuz