The requests for summary judgment made by the SEC and the defendant Daniel Pacheco were both rejected.
Through the filings, which were submitted in July 2021, both parties attempted to get the upper hand.
According to a ruling made by the court on April 4th;
Although the SEC makes a compelling argument, it has not been demonstrated that the problems are only legal and may be decided on summary judgment.
Because iPro Network and its Pro Currency investment program weren’t a securities offering, Pacheco filed his request.
In response, Pacheco claimed that because PRO Currency was given away for free as a gift when customers purchased “real things with real value,” it was not an investment contract.
The judge disapproved.
Regarding the existence of Pro Currency or the I-Pro Network as securities, there are important factual disagreements.
If the matter goes to trial, the “bundling a product or service to our Ponzi scheme makes it not a Ponzi scheme” fallacy will be presented to the jury.
I sincerely doubt it will happen because Pacheco is almost certain to lose (right).
A jury should decide on the facts before deciding whether the PRO Currency or the teaching materials encouraged customers.
The I Pro Mall, which was ostensibly going to have $4 million worth of goods that could be traded for the “prize” PRO Currency but was, it must be noted, never truly accessible to customers, was another factor in Pacheco’s argument that consumers were motivated.
Finally, Pacheco said that a list of more than 200 merchants that were interested in taking PRO Currency as payment was expanding.
Despite the SEC’s strong and convincing arguments, the only way to resolve the substantial factual issues is to go into great detail on the timeline of events and to reject Pacheco’s statements, neither of which appear to be legal issues that may be resolved on summary judgment.
To put it another way, even while the SEC’s argument is convincing and comprehensible, it doesn’t seem that the triable questions of material fact have yet evolved into legal disputes, making a grant of summary judgment in this instance inappropriate.
Although it might not be appropriate for summary judgment, the Howey Test case law about securities and investment contracts is very well-established.
By tallying the number of persons that invested in PROC outside of the MLM opportunity, Pacheco’s claims regarding “items and services” are quickly disproved.
Since PROC wasn’t made available through iPro Network outside of the associated Ponzi/pyramid scam, the answer is zero percent.
The iPro Network trial is set for August 9th, 2022, following an order issued back in January.
Updated on June 24, 2022: The court postponed the August trial for January 17th, 2023 in response to a Joint Cast Management Statement submitted on May 12th.