SEC Serves Richard Heart With Fraud Lawsuit

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  • The SEC has successfully served Richard Heart with its fraud lawsuit after weeks of trying to locate him.
  • Richard Schueler, also known as Richard Heart, evaded personal service since August, forcing the SEC to seek substitute service
  • The papers were delivered to Heart’s residence in Helsinki in October

The Securities and Exchange Commission (SEC) has revealed that it was able to serve Richard Heart with its fraud lawsuit after having failed to locate him after weeks of trying. Heart, real name Richard Schueler, had evaded service since the lawsuit was announced in August, and it took until October 31 to actually serve him with the papers. With their efforts to find him having failed, the SEC resorted to substitute service, which allowed it to deliver the papers to his residence in Helsinki, Finland, rather than to him personally which it has now done. Heart has been accused of making over $1 billion selling unregistered securities such as Hex, PulseChain, and PulseX. 

Heart Accused of Misappropriating Millions

Heart launched HEX in 2019, claiming its value exceeded gold, credit card companies, and cash. However, skepticism surrounded the token, with many deeming it a scam due to prolonged lockup requirements for rewards and a profit-driven marketing strategy. Almost three years after its launch the SEC sided with the critics and accused Heart of orchestrating an unregistered securities sale, seeking remedies such as injunctive relief, disgorgement of gains, penalties, and other equitable measures.

The complaint accused Heart of defrauding investors by misappropriating at least $12 million for personal purchases, including a “555-carat diamond, expensive watches, and high-end automobiles.” 

Uphill Battle Awaits for HEX King

Following the filing in a New York federal court, the SEC embarked on serving Heart, who is believed to reside in Helsinki, Finland. However, after a three-month search from the Finnish Ministry of Justice, the SEC received no confirmation of successful service. To overcome this, the SEC asked to pursue alternative methods, potentially involving email service, if Heart was not personally served by December 15.

This week, however, the SEC revealed in a filing that it had served Heart through a substitute service on October 31, bringing an end to his efforts to evade the attentions of the SEC. Unless he chooses to settle, Heart will, among other things, have to convince the court that his three cryptocurrencies were not securities, with victory in this endeavor likely to send a shock wave through the crypto space.