According to the most recent updates provided by James K. Filan regarding the LBRY case, the SEC has filed its opposition to LBRY's motion to limit the SEC's remedies.
In a throwback to events after LBRY lost its lawsuit with the SEC, LBRY provided the SEC with a settlement proposal on Nov. 25, following a status conference held on Nov. 21.
After the submission of the settlement proposal, both parties met to discuss the terms on Nov. 29 but were unable to resolve the terms of the remedies sought by the regulator.
Citing its financial conditions, LBRY requested an expedited briefing schedule to limit the SEC remedies, which were approved by the court. All the while, the scope of the SEC remedies was not made public. This is now coming to light, according to recent documents.
In a document attached to James K. Filan's tweet, the SEC claims that "a penalty equal to LBRY's full pecuniary gain of $22,151,971 was fair and reasonable under the circumstances."
According to the SEC, LBRY's gross receipts for its Section 5 violation equaled the value it received in exchange for its sale of 280 million LBC from its premine and market-making activity on multiple crypto asset trading platforms. It approximates this to be over $22 million.
The agency seeks from the court a penalty on LBRY equal to its gross pecuniary gain to deter LBRY and others from conducting illegal, unregistered offerings. It highlights a portion of the Securities Act that sets forth three penalty tiers, adding that the imposition of a civil monetary penalty may also follow a three-step process.
In the first step, the statutory penalty amount, adjusted for inflation, for a violation by LBRY of each tier equals the following: for the first tier, $103,591; for the second tier, $517,955; and the third tier $1,035,909.
The second step was to determine the maximum penalty. According to it, LBRY's gross pecuniary gain equals approximately $22,151,971.
LBRY's reply to the SEC motion is anticipated soon.