Settlement Reached in SEC Case Accusing American Bitcoin Academy Founder of Scamming Students

News | February 29, 2024 By:

On Thursday, February 8, 2024, the Securities and Exchange Commission filed a notice in the U.S. District Court for the District of Delaware indicating it had reached a settlement with Brian Sewell and his company Rockwell Capital Management LLC. This came after the SEC had accused Sewell of defrauding students from his cryptocurrency academy called the American Bitcoin Academy.

According to court documents, Sewell was the founder and CEO of the American Bitcoin Academy where he taught over 300 students about cryptocurrencies in online courses between 2017 and 2018. It was during this time that Sewell allegedly promoted his fund called Rockwell Fund LP to these students. Sewell had claimed the fund would invest in cryptocurrencies and other crypto assets. However, the SEC argued that Sewell misrepresented key details about himself, the fund, and its operations to investors.

Sewell purportedly told students he had college degrees that he did not actually earn. He also overstated his experience as a hedge fund manager. In total, 15 students invested $1.2 million in the fund based on Sewell’s representations. However, the SEC stated the fund was never properly launched. Their investigation found the bank company that was to administer the fund cut ties with Rockwell after several requirements were not met.

After the fund failed to get off the ground, Sewell pooled the investor money in a single cryptocurrency wallet under his control. But in May 2019, the wallet was reportedly hacked and all the funds were stolen. Still, Sewell continued providing fake account statements to investors for months afterward. When the one-year lock-up ended and investors sought to withdraw their money, Sewell tried steering them to a new venture called Zion Trades instead of repaying them.

The SEC brought claims of securities fraud and other violations against Sewell and Rockwell Capital. As part of the settlement, Sewell must pay a $223,229 civil penalty. Rockwell Capital was ordered to disgorge $1.2 million illegally gained from investors, plus $365,000 in interest. Both defendants are also barred from future securities law violations and activities, but Sewell can still trade personal crypto accounts. With the settlement, the case was brought to a close on February 8, 2024 when the federal judge approved the terms.

Please contact BlockTribune for access to a copy of this filing.