AceShowbiz - Rapper T.I. and his business partner have been sued for alleged securities fraud by investors of their cryptocurrency.
According to court documents obtained by The Blast, a group of 25 investors have claimed the "Live Your Life" rapper, real name Clifford Harris Jr., and his business partner Ryan Felton engaged in a "pump and dump" scheme, a form of securities fraud in which the price of an owned stock is inflated by making false and misleading positive statements, in order to sell the stock at a higher price.
The investors claimed they spent than $1.3 million (£998,000) "for now worthless securities called FLiK Tokens" because T.I. and Felton used "social media, celebrity endorsements, and well-known industry experts to create the false impression that FLiK Tokens were a valuable liquid investment."
They allegedly drove up the price of the tokens by claiming comedian Kevin Hart was going to be face of FLiK and come onboard as an "owner of the business," while they say Felton "created fake online posts" on behalf of Mark Cuban, the owner of the basketball team Dallas Mavericks, "in order to manipulate the value of FLiK Tokens."
The investors allege that once the value had been driven up, T.I. and Felton "dumped" their tokens and disappeared in late 2017, causing the currency to drop in price.
They claimed: "Felton explained that the devaluation was caused, at least in part, because T.I. had given FLiK tokens to members of his family and friends who had sold massive amounts on coinexchange.com causing rapid devaluation."
Once the investors realised what had happened, Felton had allegedly created a new company that had acquired FLiK.
They are suing both T.I. and Felton for securities fraud and seeking $5 million (£3.8 million) in damages.