The US Securities and Exchange Commission (SEC) is taking legal action against Founder Brian Sewell and his company Rockwell Capital Management for allegedly defrauding investors for more than a million dollars.
In a new press release, the SEC says between early 2018 to mid-2019, Sewell urged hundreds of students of his online crypto course, the Bitcoin Academy, to invest in the Rockwell Fund, which he claimed would use artificial intelligence and trading strategies to buy and sell digital assets.
The SEC alleges that Sewell’s fund got the attention of 15 students who invested a total of $1.2 million.
But instead of launching the fund and deploying the advertised trading strategies, the regulator says Sewell invested the funds in Bitcoin (BTC), which he eventually lost in a hacking incident.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, says:
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“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.”
The SEC filed a complaint with the US District Court for the District of Delaware against Sewell for violating antifraud provisions of the federal securities laws.
Sewell and his company Rockwell Capital Management have agreed to settle the fraud charges without admitting or denying the SEC’s allegations.
Sewell agreed to a civil penalty of $223,229, while Rockwell Capital agreed to disgorgement and prejudgment interest totaling $1,602,089. Both Sewell and his company also consented to injunctive relief.
The SEC says the terms of the settlement are still subject to court approval.
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