Crypto Trading Tutor Faces SEC Charges for Misleading Students into $1.2M Investment Scam
Summary:
The U.S. Securities and Exchange Commission (SEC) is scrutinizing a crypto trading course instructor, Brian Sewell, for allegedly misleading 15 students into investing $1.2 million into a non-existent hedge fund that promised high returns through advanced technology. Sewell received the funds but never launched the fund nor executed the strategies he promoted. The SEC warned it would continue to hold accountable anyone exploiting the crypto industry's hype, and Rockwell Capital Management, Sewell's company, agreed to return the $1.2 million to its investors along with a significant interest.
A tutor offering cryptocurrency trading lessons is under scrutiny by the U.S. securities regulation authority for supposedly tricking 15 students into collectively investing $1.2 million into a non-existing hedge fund that vowed to harness the power of modern technology for outstanding yields. He allegedly collected the funds without actually initiating the fund. In a recently-released public announcement by the U.S. Securities and Exchange Commission (SEC), Brian Sewell, the orchestrator behind Rockwell Capital Management, stands accused of nudging his students to pour their investments into a virtual hedge fund over the course of 2018 and 2019.
The frank statement claims that Sewell, formerly a resident of Hurricane, Utah, before a move to Puerto Rico, successfully received around $1.2 million from 15 students, yet he never set the hedge fund in motion, nor implemented the advertised investment strategies. Sewell had purportedly pledged to leverage artificial intelligence (AI) and machine learning technologies to optimize investment profits. Instead, he idly stored their funds in Bitcoin (BTC), and ultimately, his digital wallet was breached and emptied.
The SEC has broadened its alert to crypto industry-related fraudulent actors, keen to deter those capitalizing on the sector's fervor. Emphasizing their stance, the SEC stated, "Any tech-savvy buzzwords, whether that's AI, crypto, DeFi or others, won't deter the SEC from holding accountable those who use them to draw in and defraud investors."
The fraudulent Rockwell Capital Management has agreed to reimburse the $1.2 million to its investors, plus an additional interest of roughly $402,000, pending court approval. If agreed upon, Sewell himself will be made to pay a civil fine sum of $223,229.
This news follows a recent alert from another U.S. regulatory body, the Commodities and Futures Trading Commission (CFTC), advising prospective cryptocurrency investors to be wary of being ensnared by inflated promises from AI trading bots this year. The CFTC underscored those guaranteeing dazzling returns through bots, trading signal mechanisms, cryptocurrency asset arbitrage algorithms, and other AI-powered technology.
Published At
2/3/2024 4:46:51 AM
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