Crypto news – In a significant ruling, a federal court has ordered Michael Ackerman, a former New York Stock Exchange (NYSE) broker, to pay $54 million in penalties for orchestrating a cryptocurrency fraud scheme. The Commodity Futures Trading Commission (CFTC) released a statement outlining the penalties and consequences imposed on Ackerman.
According to the CFTC, Ackerman deceived nearly 150 investors, raising a total of $33 million by making false promises of substantial returns. Initially pleading not guilty to the charges, Ackerman later changed his plea in September 2021. The court proceedings culminated in a final order on June 13, officially closing the CFTC enforcement case against him.
Ackerman Faces $54 Million in Penalties for Wrongdoings
The imposed penalties require Ackerman to pay $27 million in restitution to the defrauded victims and an additional $27 million as a civil monetary penalty for his involvement in the crypto fraud. Ackerman’s fraudulent activities took place between August 2017 and December 2019, during which he operated through his company, Q3 Holdings. The company enticed investors with promises of 15% monthly returns through proprietary trading algorithms focusing on Bitcoin and other cryptocurrencies.
According to the CFTC, Ackerman managed to raise at least $33 million from more than 150 investors. However, investigations revealed that Ackerman provided false accounting details, presenting fabricated screenshots and accounting statements to mislead investors about the fund’s actual portfolio. His partners, James Seijas (a former Wells Fargo Advisors employee) and Quan Tran (a Florida general surgeon), were also deceived by the manipulated information provided by Ackerman.
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Seijas and Tran were unaware of the fund’s true asset values, as they relied on Ackerman’s misrepresented information. Contrary to Ackerman’s claims, only $10 million of the raised funds were actually invested. Ackerman unlawfully diverted the remaining funds for personal gain, indulging in extravagant purchases such as luxury cars, jewelry, and a $3 million Florida beach house.
The recent ruling by the federal court not only imposes substantial financial penalties on Ackerman but also bans him from trading in any markets overseen by the CFTC, as confirmed by the Southern District of New York court. The decision serves as a stern warning to those engaged in fraudulent activities within the cryptocurrency industry and underscores the commitment of regulatory authorities to protect investors from such schemes.