James L. Koutoulas

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26022 / June 12, 2024

James L. Koutoulas v. SEC, Case No. 23-22345-CIV (S.D. Fla. filed June 26, 2023)

SEC Obtains Court Order to Enforce Investigative Subpoena to Issuer of Purported Crypto Asset

On May 23, 2024, the U.S. District Court for the Southern District of Florida granted the Securities and Exchange Commission's application to enforce a subpoena for the production of documents to James L. Koutoulas (“Koutoulas ”), and denied Koutoulas’s petition to quash that subpoena.

If a person or entity refuses to comply with a subpoena issued by SEC enforcement staff pursuant to a formal order of investigation, the Commission may file asubpoena enforcement action in federal district court seeking an order compelling compliance.

According to the SEC's filing, the SEC is investigating whether Koutoulas or entities he controlled violated the federal securities laws in connection with the offer and sale of the “Let’s Go Brandon” Coin (“LGBCoin”). As part of the investigation, the SEC issued an administrative subpoena to Koutoulas seeking documents and communications relevant to determining whether LGBCoin was offered and sold as a security. Rather than complying with the subpoena, Koutoulas filed a petition to quash, arguing that the SEC lacked jurisdiction because LGBCoin is not a security. The SEC opposed the petition and cross petitioned for an order compelling obedience with the subpoena.

On May 23, 2024, the Court denied Koutoulas’s petition, and ordered him to comply with the subpoena. The Court opined that the SEC may investigate whether certain conduct falls within its regulatory purview and found that “the information sought by the subpoena is exactly the type of evidence that would be needed in order to make the legal determination of whether LGBCoin was part of a transaction in securities.”

The SEC is continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws.

The SEC's investigation is being conducted by Austin Stephenson of the SEC's Atlanta Regional Office under the supervision of Peter Diskin. Messrs. Stephenson, W. Shawn Murnahan and M. Graham Loomis litigated thesubpoena enforcement action.