A leading US regulator has confirmed the filing of an emergency action against two brothers and a series of companies owned by them.
The Securities and Exchange Commission (SEC) made the move against two men from the state of Pennsylvania – Shane Hvizdzak and Sean Hvizdzak – plus three business entities that they run.
The regulator secured an emergency action as well a temporary restraining order over claims that they were offering a fraudulent cryptocurrency scheme.
Allegedly, the pair offered a securities fund that supposedly invested in digital assets.
However, according to the SEC, the pair in fact did not represent the performance of the fund correctly when appealing to traders.
They also made false financial statements and audit documents, the SEC claimed.
In a statement, the regulator shared the figures that it claims the pair misrepresented when marketing their scheme to potential investors.
“According to the SEC’s complaint, from at least July 2019 through May 2020, brothers Sean Hvizdzak and Shane Hvizdzak offered securities in a private fund that purported to invest in digital assets by misrepresenting fund performance, fabricating financial statements, and forging audit documents,” it said.
“For example, the complaint alleges that the Hvizdzaks misrepresented in marketing materials that the fund earned 100.77% and 92.90% on its investments during the third and fourth quarters of 2019, when in fact the fund actually lost money in those quarters.”
It also went on to claim that some of the cash invested in the fund found its way into the pockets of the two brothers.
“In addition, the SEC alleges that the brothers diverted tens of millions of dollars from the fund to personal accounts at banks and digital asset trading platforms, and then transferred the assets on multiple blockchains to themselves and others,” it added.
The complaint by the regulator was unsealed late last week in the US District Court for the Western District of Pennsylvania.
In addition to the accusations levelled at the two brothers, the entities – or companies – involved in the case are Hvizdzak Capital Management, LLC; High Street Capital, LLC; and High Street Capital Partners, LLC.
The move came after the court also took other steps to aid the case.
These include “an order prohibiting the destruction of documents,” the SEC said in its statement.
The next key stage is likely to be a hearing, which will occur on 30th June.
At this hearing, there is likely to be consideration of a continued asset freeze and potentially even the issuance of a preliminary injunction.
According to Adam S. Aderton, who serves as the co-chief of the SEC’s Asset Management Unit, the case could serve as a warning to future potential investors in schemes that claim on the face of it to have strong performance statistics.
“As alleged in our complaint, the Hvizdzaks touted exceptional, but false, performance to potential investors when offering their fund,” he was quoted as saying.
“Investors should be skeptical of claims that seem too good to be true,” he added.
- Be Wary of Phony Lawyers Pushing Fraudulent Forex Recovery Scams
- Cybercrime still on the rise – be wary of potential scams
- Crude Oil – 4-Hour – Bulls Might Continue Their Reign
- How to Learn to Trade Unpredictable Summer Markets
- “The Dollar’s Out of Bed and it’s All Turning Red”
- Dating App Tinder – The New Scam in Town
Be Wary of Phony Lawyers Pushing Fraudulent Forex Recovery Scams
Cybercrime still on the rise – be wary of potential scams
Safest Forest Brokers 2020
|Broker||Info||Best In||Customer Satisfaction Score|
|#1||Your capital is at risk Founded: 2011||Global CFD & FX Broker||
BEST FOREX BROKER Visit broker
|#2||Your capital is at risk Founded: 2015||Global Forex & CFD Broker||
LOWEST FEES Visit broker
|#3||Your capital is at risk Founded: 2014||Global Forex & CFD Broker||
Best Trading Conditions Visit broker
|#4||Your capital is at risk Founded: 2014||Global Forex Broker||
BEST SPREADS Visit broker
|#5||CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010||Global Forex Broker||
Low minimum deposit Visit broker
Stay up to date with the latest Forex scam alerts
Sign up to receive our up-to-date broker reviews, new fraud warnings and special offers direct to your inbox