The U.S. Securities and Exchange Commission (SEC) has charged a Florida-based businessman in connection with a crypto trading scheme described by the regulator as a “crypto fraud.” The regulator said that the convicted felon Thomas J. Gity misrepresented his experience, claiming to be a highly-successful digital asset trader in soliciting investment from at least 18 victims. According to the SEC complaint, Gity raised $6.8 million after claiming never to have lost money during a trading day.
The convicted felon used raised funds for personal use.
Gity was found to have no prior experience in financial services. To fool investors into parting with their money, he allegedly presented forged documents purporting to show $100 million in assets under management, and statements showing returns running in some cases beyond 46% in a week. Despite claiming he was raising the money for cryptocurrency investment, Gity transferred less than $1 million to trading accounts, while sending $1.8 million to his son. He then used the remainder of the money to pay off early investors, in a scheme described as “Ponzi-like,” as well as funding his personal gambling and lifestyle expenses.
The U.S. regulator is seeking civil penalties against Gity.
The U.S. SEC revealed that it had filed charges in Miami, seeking civil penalties and injunctive relief against Gity. “The SEC’s complaint, filed in federal court in Miami, charges Gity with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933.” “The SEC seeks a civil penalty and injunctive relief against Gity, including a conduct-based injunction that prevents Gity from participating in any securities offerings. The complaint also seeks disgorgement with prejudgment interest from Gity.