A U.S. federal judge has ordered the Securities and Exchange Commission to pay legal fees of about $1.8 million in its case against Digital Licensing Inc., doing business as Debt Box. The judge dismissed the SEC’s case against Debt Box without prejudice, meaning the case could potentially be reopened in the future.
In an order filed on Tuesday, Utah District Court Judge Robert Shelby ruled that the SEC needs to pay the attorney fees and relevant legal fees. “In this Order, the court ensures the final amount of fees requested by Defendants and the Receiver is reasonable,” the filing said.
In another Tuesday filing, the judge ruled that the case has been dismissed without prejudice as per SEC’s request. “The Commission argues dismissal without prejudice is appropriate because it will protect investors and the public interest, and will not cause Defendants legal prejudice,” the filing noted.
“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. This is a significant step towards justice and transparency,” Debt Box wrote in an X post following the order. “This means the case is closed, and any future action by the SEC would have to go through Judge Shelby.”
In July 2023, the SEC filed a complaint against Debt Box, accusing it of “defrauding investors of at least $49 million.”
The federal judge, however, previously criticized the SEC in a March filing, particularly on the agency’s conduct in getting the temporary restraining order, which included an asset freeze and a court-appointed receiver to assume control of the company.
In April, two SEC’s lawyers, who were heading the case against Debt Box, reportedly resigned after the Utah judge said the case was “marred by false statements and misrepresentations.”
The SEC said in December that it had made inaccurate statements, saying it “fell short” of the expectations to be accurate and candid in court.