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

These fines, covering attorney fees and costs, were imposed due to the SEC’s bad faith conduct, including misrepresentations made to obtain emergency ex parte relief.

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

DEBT Box and other defendants had argued for dismissal with prejudice to prevent further SEC enforcement actions, but they viewed the ruling positively, stating:

“This is a significant victory for us as it prevents the SEC from proceeding with the current case.”

The court declined to dismiss the case with prejudice because it is still early in the legal process, defendants have not incurred substantial trial expenses yet, and SEC enforcement serves the public interest.

In March, the court had sanctioned the SEC for misconduct related to its enforcement actions against DEBT Box, including inaccurate information provided to justify legal orders. This previous ruling barred the SEC from refiling the case, a decision now reversed by the SEC’s successful motion for dismissal without prejudice.