The US District Court for the District of Utah has dismissed the SEC’s case against DEBT Box without prejudice and has imposed fines exceeding $1.8 million on the watchdog for misconduct.

The fines, comprising attorney fees and costs, were levied against the SEC for deceptive conduct in obtaining emergency ex parte relief.

The court granted the SEC’s motion to dismiss the current case without prejudice, allowing the agency to file a related case in the same court before the same judge in the future.

DEBT Box and other defendants had argued for the case to be dismissed with prejudice to prevent further enforcement actions by the SEC. However, DEBT Box viewed the ruling as a positive development.

DEBT Box stated:

“This is a significant victory for us. It means that the SEC cannot proceed with the case as it stands.”

The court declined to dismiss the case with prejudice due to its early stage, minimal trial expenses incurred by the defendants, and the public interest in the SEC’s enforcement activities.

In March, the SEC faced sanctions for its misconduct, which began with enforcement action against DEBT Box in July 2023 over allegations of involvement in a $50 million fraud scheme. The SEC obtained a temporary restraining order and asset freeze against the firm but provided misleading information to the court to justify its orders.

The court’s decision to dismiss the case without prejudice reverses its previous ruling that the SEC could not refile its case.