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by Mike Caswell

A federal judge in Minnesota has declined to order sanctions against the U.S. Securities and Exchange Commission after it dropped its hard-fought case against Chip Rice, a man accused of improperly selling of hundreds of millions of shares in listings that included Grow Solutions Holdings Inc. of Saskatchewan. Mr. Rice complained that the SEC pursued him in a "protracted and arguably vindictive" manner before asking that the judge dismiss the case. He said that he lost his income and suffered public ridicule as a result of the charges.

The decision comes as part of a case in which the SEC cited Mr. Rice for a scheme involving stock that he obtained through convertible notes. The SEC said that Mr. Rice illegally unloaded the shares over a four-year period, with his sales amounting to unregistered offerings. The scheme generated gains that the SEC calculated to be $13.9-million. (All figures are in U.S. dollars.)

After two years of legal back-and-forth, the SEC won an $11-million judgment against Mr. Rice on Sept. 23, 2024, but he appealed that decision almost immediately. He had previously complained that there was no basis for the charges, as there was nothing illegal about his share sales. He said that his business amounted to buying convertible notes and selling the stock on the market, a practice that was entirely legitimate.

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