U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25721 / May 11, 2023
Securities and Exchange Commission v. GA Investors, No. 1:23-cv-11050 (D. Mass. filed May 11, 2023)
SEC Charges Operators of Dozens of Websites with Offering Fraud Involving Crypto Assets
The Securities and Exchange Commission today announced charges against GA Investors and John Does 1-4 alleging that the defendants conducted fraudulent offerings of securities, including crypto asset mining pools, through dozens of websites. Among other emergency relief, the SEC seeks an order requiring that defendants' fraudulent websites be taken down immediately.
The SEC's complaint alleges that defendants have offered investments through dozens of fraudulent websites including GA-Investors.org. According to the complaint, the websites offered exorbitant returns -- in some cases as high as 61.9% in 24 hours -- for investments in various securities. The complaint alleges that some of the websites also impersonated legitimate companies, including a registered broker-dealer. As alleged in the complaint, defendants solicited investors across the world, including investors in the United States, who invested approximately $85,000 in GA Investors' fraudulent securities offering. The complaint alleges that the GA Investors website offered guaranteed daily returns ranging from 2% to 4.5%. As alleged in the complaint, investors were directed to purchase crypto assets from a separate crypto asset trading platform and transfer those crypto assets to a GA Investors wallet address. The complaint alleges that, although some investors were able to make small withdrawals from their accounts, when the investors sought to recoup larger portions of their investments, the defendants froze investor accounts and misappropriated the investor funds.
The SEC's complaint, filed in federal court in Massachusetts, charges GA Investors and John Does 1-4 with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks an order granting a temporary restraining order, asset freeze, and other emergency relief. The complaint also seeks permanent injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, and civil monetary penalties.
The SEC's Office of Investor Education and Advocacy (OIEA) has issued Investor Alerts warning investors about fraudulent crypto trading websites and crypto investment scams. Additionally, OIEA and the FBI jointly warned investors about fraudsters who falsely claim to be registered -- or who impersonate registered investment professionals -- in order to lure investors into scams.
The SEC's investigation was conducted by Kerry Dakin, Alyssa DiPaolo, Sean Fishkind, David London, Russell Mawn, John McCann, and Celia Moore, of the SEC's Boston Regional Office.