Federal Judge Dismisses SEC Lawsuit Against Richard Heart
A federal judge has ruled in favor of Richard Heart, the founder of HEX, PulseChain, and PulseX, dismissing the lawsuit brought by the U.S. Securities and Exchange Commission (SEC). The court determined that the SEC lacked jurisdiction over the case, primarily because the projects in question did not specifically target American investors.
In her ruling, Judge Carol Bagley Amon stated, “The relevant online communications described in the Complaint during the offer periods consist of untargeted, globally available information.” She further elaborated that the SEC did not provide adequate facts to suggest that Heart’s online statements were intentionally directed at the United States, as opposed to reaching a global audience.
Under U.S. securities law, the burden lies on the SEC to demonstrate that a defendant has actively engaged with the U.S. market. The court concluded that Heart’s communications were characterized as “untargeted, globally available information,” which did not showcase any deliberate intention to solicit U.S. investors. Additionally, it was noted that the tokens associated with Heart’s projects were not made available on American exchanges.
The court also addressed the argument regarding the involvement of U.S. individuals in the project. It stated that the mere participation of U.S. persons in the offerings did not provide the SEC with jurisdiction. The complaint merely claimed that an unspecified number of U.S.-based investors were involved without proving that any transactions took place within the United States.
The SEC now faces the option to appeal this ruling or amend its complaint within a window of 20 days.
