Fedance v. Harris, No. 20-12222 (11th Cir. 2021)Annotate this Case
In mid-2017, Felton created an “offshore entity,” FLiK, for “developing [an] online viewing platform that [would] allow creatives to sell/rent their projects.” To raise funds, FLiK created cryptographic “FLiK Tokens” and represented that investors could redeem the tokens on its platform after it launched. FLiK never registered FLiK Tokens with the SEC but promoted FLik on social media and published a whitepaper with details about the company. FLiK announced that “T.I.,” an Atlanta-based rapper and actor (Harris), had joined Felton. The actor Kevin Hart tweeted a photograph of himself with Harris and wrote, “I’m Super Excited for [T.I.] and his new venture with @TheFlikIO! FLiK sold the tokens for about six cents each. The value of FLiK tokens soared and then crashed down. Felton largely ignored messages from token purchasers. None of FLiK’s services or projects came to fruition.
Fedance, who had purchased $3,000 worth of FLiK Tokens, brought a putative class action under the Securities Act of 1933, 15 U.S.C. 77l(a)(1), 77o(a), alleging that Felton and Harris sold unregistered securities, that Harris acted as a “statutory seller” of unregistered securities, and that Felton and Harris were liable as controlling persons of an entity, The district court dismissed the complaint as untimely under a one-year statute of limitations. The Eleventh Circuit affirmed. The complaint does not plausibly allege that Felton or Harris fraudulently concealed the facts necessary to assert claims under sections 12(a)(1) or 15(a) against them.