SEC's complaint, Sewell urged hundreds of his online students to invest in the Rockwell Fund, a hedge fund that he promised to launch. He claimed that the fund would utilize advanced technologies such as artificial intelligence and crypto asset trading strategies to generate profits for investors.
Brian Sewell and his company, Rockwell Capital Management, have reached a settlement with the Securities and Exchange Commission (SEC) after being charged with fraud. The scheme targeted students who were enrolled in Sewell's online crypto trading course, known as the American Bitcoin Academy. The SEC claims that this fraudulent activity resulted in 15 students losing a total of $1.2 million.
According to the SEC's complaint, Sewell urged hundreds of his online students to invest in the Rockwell Fund, a hedge fund that he promised to launch. He claimed that the fund would utilize advanced technologies such as artificial intelligence and crypto asset trading strategies to generate profits for investors.
However, the complaint alleges that Sewell never launched the fund or implemented the advertised trading strategies. Instead, he held onto the invested money in bitcoin. Unfortunately, Sewell's digital wallet was hacked, resulting in the theft of the bitcoin.
“We allege that Sewell defrauded students in his online American Bitcoin Academy of over a million dollars through a series of lies about investment opportunities in his purported crypto hedge fund. Among other things, he falsely claimed that his investment strategies would be guided by his own ‘artificial intelligence’ and ‘machine learning’ technology which, like the fund itself, never existed,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Whether it’s AI, crypto, DeFi or some other buzzword, the SEC will continue to hold accountable those who claim to use attention-grabbing technologies to attract and defraud investors.”
It is disheartening to see individuals taking advantage of others' trust and financial aspirations. The SEC's actions in holding Sewell and Rockwell Capital Management accountable for their fraudulent activities are crucial in maintaining the integrity of the financial markets.
The defendants in the case filed by the SEC in the U.S. District Court for the District of Delaware have been accused of violating antifraud provisions of the federal securities laws. However, they have agreed to settle the charges without admitting or denying the allegations.
As part of the settlement, Defendant Rockwell Capital Management will pay disgorgement and prejudgment interest amounting to $1,602,089, while Defendant Sewell will face a civil penalty of $223,229. It's important to note that the settlement is still subject to court approval.
During the investigation, Matthew S. Raalf, Jacquelyn D. King, Gregory Bockin, and Karen M. Klotz from the Philadelphia Regional Office provided valuable assistance. Assunta Vivolo, Scott A. Thompson, and Nicholas P. Grippo supervised the investigation.
To protect investors, the SEC's Office of Investor Education and Advocacy advises individuals to thoroughly research investment opportunities and to be cautious when dealing with individuals selling investments. The office has also issued Investor Alerts regarding investment frauds related to new technologies. For more information, investors can visit Investor.gov and SEC.gov.
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