The US Securities and Exchange Commission (SEC) is taking legal action against Brian Sewell and his company Rockwell Capital Management for allegedly defrauding investors of more than $1 million.
In a new press release, the SEC says, between early 2018 and mid-2019, Sewell urged hundreds of students from his online crypto course, the Bitcoin Academy, to invest in the Rockwell Fund, which he said would use artificial intelligence and trading strategies to buying and selling digital assets.
The SEC alleges that Sewell’s fund attracted 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 money in Bitcoin (BTC), which he ultimately lost in a hacking incident.
Says Gurbir S. Grewal, Director of the SEC’s Division of Enforcement:
“We allege that Sewell defrauded students in his online US Bitcoin Academy of more than 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 against Sewell in the U.S. District Court for the District of Delaware for violating the anti-fraud 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 early interest totaling $1,602,089. Both Sewell and his company also agreed to a preliminary injunction.
The SEC says the terms of the settlement are still subject to court approval.
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