A cryptocurrency trading course instructor, Brian Sewell, is facing charges from the U.S. Securities and Exchange Commission (SEC) for allegedly misleading 15 students into investing $1.2 million in a hedge fund that never materialized. Sewell, the founder of Rockwell Capital Management, is accused of soliciting funds from students between early 2018 and mid-2019, claiming to utilize cutting-edge technology. Despite promising to launch an investment fund and employ artificial intelligence (AI) and machine learning, Sewell reportedly failed to execute the transactions and never initiated the fund.
According to the SEC's statement, Sewell kept the student funds in Bitcoin, which were later lost when his digital wallet was hacked. The SEC issued a broader warning against scammers in the crypto industry, emphasizing its commitment to taking action against those exploiting the industry's hype. The regulator stated that it would hold accountable individuals making false claims about using compelling technologies to attract and deceive investors.
Rockwell Capital Management has agreed to return the $1.2 million to investors, along with approximately $402,000 in prejudgment interest. Pending court approval, Sewell will also pay a civil penalty of $223,229. This case reflects the SEC's vigilance in addressing fraudulent activities in the cryptocurrency space, particularly those involving exaggerated promises related to emerging technologies like AI.
This development follows a similar warning from the Commodity and Futures Trading Commission (CFTC), cautioning cryptocurrency investors about being lured by exaggerated promises from artificial intelligence trading bots. The CFTC emphasized the need for vigilance and skepticism, particularly in instances where individuals make unrealistic claims about the performance of AI-assisted technologies, including trading bots and algorithms.
