A crypto trading course instructor is facing charges from the United States securities regulator. The charges allege that the instructor misled 15 students into investing $1.2 million in a hedge fund that promised to generate large profits.
He reportedly took the funds but failed to launch the investment fund despite his claims to use cutting-edge technology. Moreover, The U.S. SEC said that Brian Sewell never launched the crypto hedge fund in which he promised the use of AI and also other strategies for maximizing returns.
According to a recent statement by the U.S. Securities and Exchange Commission (SEC), Brian Sewell, the founder of Rockwell Capital Management, has reportedly called on investors. He urged them to place funds into a non-existent hedge fund from early 2018 till mid-2019.
“The complaint says Sewell, who once lived in Hurricane, Utah but now lives in Puerto Rico, took in about $1.2 million from 15 students but never launched the fund nor executed the trading strategies he advertised to investors.”
Furthermore, Sewell allegedly pledged to utilize artificial intelligence (AI) and machine-learning technology to maximize investor returns. Further allegations claim that he parked his students’ funds in Bitcoin (BTC) but ultimately lost their entire investment when his crypto wallet was hacked. It continued,
“The complaint further alleged that the bitcoin was eventually stolen when Plaintiff’s digital wallet was hacked and looted.”
SEC Warns Crypto Scams, Hedge Fund Settlement
The SEC issued a broader warning to scammers in the crypto industry. It stated its intention to take action against those exploiting the industry’s hype. According to the SEC in the statement,
“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.”
Under the settlement, Rockwell Capital Management would return approximately $1.2 million plus prejudgment interest of about $402,000 to investors. If the court approves the settlement, Sewell will pay a civil penalty of $223,229.
This comes after another U.S. regulator, the Commodities and Futures Trading Commission (CFTC), had earlier warned unfortunate crypto investors searching for huge returns in 2024 to be cautious of Artificial Intelligence trading bots making exaggerated promises to the AI trading bots.
The CFTC had highlighted these entities for their impressive yields. These technologies, including bots, trade signal algorithms, crypto-asset arbitrage algorithms, and other AI technologies, generated the yields.
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