In a recent development, the U.S. Securities and Exchange Commission (SEC) has taken action against Brian Sewell and his company, Rockwell Capital Management, in connection with a fraudulent scheme that targeted students enrolled in Sewell’s online crypto trading course, the American Bitcoin Academy. This scheme has left 15 students out of pocket by a staggering $1.2 million.
According to the SEC’s complaint, the fraudulent activities took place from early 2018 to mid-2019. During this time, Sewell persuaded hundreds of his online students to invest in the Rockwell Fund, a hedge fund he claimed he would establish. Sewell promised that the fund would employ cutting-edge technologies such as artificial intelligence and crypto asset trading strategies to generate substantial returns for investors.
However, the complaint alleges that Sewell, who initially resided in Hurricane, Utah, before moving to Puerto Rico, received approximately $1.2 million from 15 students but failed to launch the fund or execute the advertised trading strategies. Instead, he retained the invested funds in Bitcoin. Tragically, the Bitcoin holdings eventually fell victim to theft when Sewell’s digital wallet was hacked and emptied.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated, „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.“
This case serves as a stark reminder that individuals must exercise caution and due diligence when considering investment opportunities, especially in the rapidly evolving world of cryptocurrencies and online courses. The SEC is committed to holding accountable those who use attention-grabbing technologies to attract and defraud investors.
The SEC’s complaint, filed in the U.S. District Court for the District of Delaware, charges the defendants with violating antifraud provisions of the federal securities laws. Both defendants, without admitting or denying the allegations, have agreed to injunctive relief. Rockwell Capital Management has also agreed to pay disgorgement and prejudgment interest totaling $1,602,089, while Brian Sewell agreed to a civil penalty of $223,229. The settlement remains subject to court approval.
The investigation was carried out by Matthew S. Raalf and Jacquelyn D. King with assistance from Gregory Bockin and Karen M. Klotz, all of the Philadelphia Regional Office, under the supervision of Assunta Vivolo, Scott A. Thompson, and Nicholas P. Grippo.
The SEC’s Office of Investor Education and Advocacy emphasizes the importance of researching and verifying the background of individuals promoting investment opportunities. It advises investors to independently research any investment opportunities and stay informed about potential risks, particularly when confronted with investment frauds that claim to leverage new and exciting technologies.
For more information and resources related to investor protection, visit Investor.gov and SEC.gov or access the article directly here.