On March 23, 2023, the Securities and Exchange Commission charged Aaron Cain McKnight with orchestrating three separate fraudulent investment schemes through which he allegedly stole more than $8.4 million from at least 28 investors. The SEC also charged a lawyer, his law firm, a promoter, and McKnight's sister with aiding and abetting aspects of the schemes.

According to the SEC's complaint, between March 2018 and September 2021, McKnight ran three schemes that, while separate, followed a similar pattern. In each scheme, McKnight allegedly portrayed himself as an experienced professional controlling financial services firms, through which he offered investment opportunities that promised extraordinary returns but that, in reality, did not exist. Using his fabricated credentials, he allegedly raised funds from numerous investors only to then use the investors' money for non-investment purposes, including personal expenses, operation of his outside business, and/or Ponzi-like payments to earlier investors.

The SEC further alleges that lawyer Kenneth Miller and his law firm, Frost & Miller, LLP ("F&M"), substantially assisted McKnight's first scheme by receiving and immediately distributing over $2 million of investor funds at McKnight's direction. According to the SEC, Miller and F&M provided this assistance despite not having a clear understanding of why the funds were sent to F&M, who the funds had come from or were going to, or what function the investors expected F&M to serve.

The SEC's complaint, filed in Texas federal court, charges McKnight and two entities he employed in one of the schemes, BPM Global Investments, LLC ("BPM Global") and BPM Asset Management, LLC ("BPMAM"), with violating various antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder. The complaint also charges Sherry Rebekka Sims, Harmony Brooke McKnight, Miller, and F&M with aiding and abetting certain of these violations, and names Timothy Neher and his company, Accelerated Venture Partners, LLC, as relief defendants. Additionally, the complaint charges McKnight and Harmony McKnight as control persons under Section 20(a) of the Exchange Act for the violations of BPM Global and BPMAM. The SEC's complaint seeks permanent injunctions, including conduct-based injunctions, disgorgement of ill-gotten gains, civil penalties, and officer and director bars.

Without admitting or denying the SEC's allegations, Sims consented to a bifurcated settlement, agreeing to the entry of a final judgment that, among other things, permanently enjoins her from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and from soliciting, or issuing guarantees in connection with, the purchase or sale of securities. Civil penalties will be determined by the court at a later date upon motion of the Commission.

The SEC's investigation was conducted by Jason Anthony and Michael Flanagan, and was supervised by Paul Pashkoff and Melissa Hodgman. The SEC's litigation will be led by Anna Area and supervised by David Nasse.

The SEC's Office of Investor Education and Advocacy has issued investor alerts on the red flags of investment fraud. Additional information is available on Investor.gov.