In a recent crackdown on fraudulent financial activity, the U.S. Securities and Exchange Commission (SEC) has charged an investment course instructor with defrauding students out of $1.2 million. The man behind the scheme, Brian Sewell, falsely claimed to run a sophisticated crypto hedge fund that uses artificial intelligence to boost returns.
From 2018 to 2019, Sewell convinced 15 students to invest in Rockwell Capital Management, a phantom hedge fund, without actually launching a fund or adopting the trading strategy promised. He is said to have persuaded him. Instead, funds remained stagnant in Bitcoin, ultimately leading to losses when the digital wallet was compromised.
Key Point:
- $1.2 million He used false pretenses to exploit students.
- The promised AI-driven trading strategies were never applied.
- Investors' funds were left in Bitcoin, which was then hacked.
- The SEC is committed to pursuing fraudsters in the cryptocurrency space.
The SEC's legal action underscores the agency's commitment to protecting investors from the lure of high-tech investment fraud. Rockwell Capital Management has agreed to repay the entire amount plus $402,000 in interest, pending court approval. In addition, Mr. Sewell will pay a civil penalty of $223,229.
The development echoes a similar advisory from the Commodity Futures Trading Commission (CFTC), which warns investors against the seductive promises of AI trading bots and algorithms that claim exorbitant profits. .
Investors are reminded to remain vigilant and to scrutinize investment opportunities, particularly those boasting high-tech methods, to avoid falling prey to scams.