Judge Orders SEC to Pay $1.8 Million in Legal Fees, Dismisses Case Against Debt Box

U.S. District Court Judge Robert Shelby has ordered the Securities and Exchange Commission (SEC) to pay approximately $1.8 million in legal fees incurred by Debt Box. The judge’s ruling comes as he dismissed the SEC’s case against Debt Box without prejudice.

Key points:

• Judge Shelby ordered the SEC to cover the attorney fees and relevant legal fees incurred by Debt Box.
• The case has been dismissed without prejudice at the SEC’s request, allowing for potential future action.
• Debt Box hailed the court’s decision as a major step towards justice and transparency.
• In July 2023, the SEC accused Debt Box of defrauding investors of at least $49 million.
• The judge previously criticized the SEC’s conduct in obtaining a temporary restraining order, which included an asset freeze and a court-appointed receiver.
• In December, the SEC stated that it had issued false representations and “fell short” of its standards of accuracy.

According to the court filings, Judge Shelby ensured that the final amount of fees requested by the defendants and the receiver was reasonable.

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SEC argued dismissing Debt Box case without prejudice was appropriate

The SEC argued that dismissing the case without prejudice was appropriate to protect investors and the public interest while not causing legal prejudice to the defendants.

Debt Box took to X to express their satisfaction with the court’s decision, stating, “The court has imposed sanctions on the SEC, requiring them to cover the attorney fees and costs that D.E.B.T. Box incurred during this legal battle.”

In July 2023, the SEC filed a complaint accusing the company of defrauding investors of at least $49 million. However, Judge Shelby had previously criticized the SEC’s conduct in obtaining a temporary restraining order. This included an asset freeze and the appointment of a court-appointed receiver to assume control of the company.

The judge’s criticism led to the resignation of two SEC lawyers who were heading the case against Debt Box in April. The judge declared the case “marred by false statements and misrepresentations,” prompting the lawyers to step down.

The SEC also acknowledged that it had made inaccurate statements and “fell short” of the expectations to be accurate and candid in court.