SEC Charges Founder of Bitcoin Trading Course with Fraudulent Scheme

SEC Charges Founder of American Bitcoin Academy Online Crypto Course with Fraud Targeting Students

The Securities and Exchange Commission today announced that Brian Sewell and his company, Rockwell Capital Management, agreed to settle fraud charges in connection with a scheme that targeted students taking Sewell’s online crypto trading course known as the American Bitcoin Academy. The SEC alleges that the fraudulent scheme cost 15 students $1.2 million.

According to the SEC’s complaint, from at least early 2018 to mid-2019, Sewell encouraged hundreds of his online students to invest in the Rockwell Fund, a hedge fund that he claimed he would launch, and which would use cutting-edge technologies like artificial intelligence and trading strategies involving crypto assets to generate returns for investors. The complaint alleges that Sewell, who resided in Hurricane, Utah, before relocating to Puerto Rico, received approximately $1.2 million from 15 students but never launched the fund nor executed the trading strategies he advertised to investors, instead holding on to the invested money in bitcoin. The complaint further alleges that the bitcoin was eventually stolen when Sewell’s digital wallet was hacked and looted.

Paul, Weiss Files Amicus Brief on Behalf of Over 20 Former Senior Government Officials in Landmark SEC Enforcement Action Over Cybersecurity Disclosures

On February 2, Paul, Weiss filed an amicus brief in the U.S. District Court for the Southern District of New York on behalf of over 20 of the most senior former cybersecurity government officials in the U.S. Securities and Exchange Commission’s landmark enforcement action against software company SolarWinds and its Chief Information Security Officer (CISO) Timothy Brown. The SolarWinds suit represents the first time the SEC has initiated litigation against a company for allegedly deficient cybersecurity disclosures, as well as the first time an individual CISO has been named as a defendant in an SEC action of this kind. In the brief, amici urge the court to carefully evaluate how enforcement actions such as this one may disincentivize companies from sharing critical cybersecurity information with government authorities.

Elon Musk Took Drugs With Some Tesla Board Members, WSJ Says

Elon Musk’s use of illegal drugs was common knowledge among several current and former Tesla Inc. and SpaceX directors, the Wall Street Journal reported on Saturday. There was concern about the volume of Musk’s illegal drug use and that he consumed drugs with some of his board members, the newspaper reported, citing people who have witnessed the drug use or were briefed on it. The Tesla board didn’t investigate the issue, nor did it document any concerns, the paper said.

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Some friends and directors felt they they had to take illegal drugs with Musk as it could otherwise upset him, the paper reported Saturday, citing some of the people. They also didn’t want to risk “losing the social capital” of being in his circle, the paper said.

FEPA’s Expansion of Anti-Corruption Act Barely Moves the Needle

New corporate anti-corruption policies are often rolled out with dramatic, often exaggerated assessments of their significance. This is true of the Foreign Extortion Prevention Act enacted in December. It has been described as a sea change in federal anti-bribery law and a new statutory basis for multinational companies to reexamine their compliance programs.

In reality, FEPA’s substantive and jurisdictional limitations make it largely an anti-corruption nonevent.

Crypto Marketers Have a New Target Audience: Your Mother

They all do the same thing. That puts so much pressure on marketing because, all else equal, it’s how you can stand out,” he said.

Many firms are targeting an audience of advisers and investors that is older, wealthier, and more risk-averse than current bitcoin enthusiasts, Balchunas said.

In other words, they are the parents of your typical crypto bro.

“How can I buy bitcoin???” a contact labeled “Mom” texts in a promotional video from investment management firm VanEck, which posted it on X on Jan. 10.

“It’s easy now…” her child texts back. “There are ETFs.”

“WOW!!!!!!!!!!! THANK YOU pumpkin,” Mom writes, adding a cluster of heart, smiley-face and other emojis.

Biden’s top financial cop faces showdown with Wall Street

The legal actions threaten to undermine the agenda of one of President Joe Biden’s most aggressive regulators and come as the agency tries to push out a number of measures before the November elections.

The Chamber of Commerce recently convinced a court to knock down a stock-buyback reporting rule — handing Gensler his first major defeat — and is targeting another regulation on shareholder advisers. Investors are looking to block game-changing private-fund reforms, with oral arguments set to begin Feb. 5. Hedge fund groups are challenging new disclosure rules. And business associations are threatening to go after more than a half-dozen other planned rules, including one of Gensler’s most ambitious proposals — a climate risk reporting mandate.

“It’s a minefield for the SEC,” said Kurt Gottschall, the former regional director of the agency’s Denver office who is now a partner at the law firm Haynes Boone. “The more ambitious the rulemaking, the more ambitious the pushback.”