Wed, 03 Mar 2021

Asset manager which offered returns of 1,600 per cent shut down by SEC

By Jay Jackson, Kentucky State News.Net
20 Sep 2019, 21:21 GMT+10

WASHINGTON, DC - The United States Securities and Exchange Commission has filed an emergency action to obtain a temporary restraining order and frozen the assets of three men and 3 entities in connection with an alleged $125 million fraud.

According to the SEC's complaint, beginning in March 2016, Mediatrix Capital Inc. and its three principals, Michael S. Young, Michael S. Stewart, and Bryant E. Sewall, induced investors to invest by falsely representing that their money would be invested using a highly profitable algorithmic trading strategy that had never experienced an unprofitable month and had returned more than 1,600% since inception.

The firm, in January this year was awarded the Top Global Asset Manager Award for measured net returns in a five-year period.

"It is a great honor to be recognized for our consistent, strong performance on behalf of our investors over the last five years. As of November 2018, we have achieved 60 straight months of client gains which I attribute to a 'defense first' structure that emphasizes capital preservation and although has allowed for high growth with controlled risk. We have worked hard to be in a position to receive this award and are grateful to Autumn Gold for the recognition," Mediatrix Capital CEO Michael S. Young said in accepting the award.

Mediatrix Capital's strategy was described as having no initial bias to market direction and using a comprehensive structure of proprietary algorithms that use current market momentum and a mix of diverse high probability technical analysis indications for entry and exits into the forex markets. Mediatrix classified its Navigator Algo as a "Dynamic Algo," allowing for on-the-fly automated and manual input changes to the math and methodologies utilized while trading. In so doing, the team said it was able to adapt with the market as macro and micro relational changes between currencies occur in cycle.

"I have worked with many leading Forex firms and Commodity Trade Advisors worldwide, and have been very impressed with Mediatrix Capital's success to date. The team has been able to provide investors with dependable monthly returns that most investors would only hope for in a year's time. It's our pleasure to present Mediatrix Capital with this prestigious award," Autumn Gold Founder Kim Avery said in presenting the award.

In truth, as the SEC order outlined, the Nassau, Bahamas-based Mediatrix and its principals' trading strategy consistently lost money-losing more than $18 million from its trading in 2018 alone. In addition to repeatedly misrepresenting the profitability of the trading, it is alleged Mediatrix also misled investors by falsifying account statements and making Ponzi-like payments, all while misappropriating more than $35 million of investor money for the principals' personal use, including the purchase of luxury properties and vehicles.

"We allege that this scheme has resulted in tens of millions of dollars in investor losses, in part, to fund defendants' luxurious lifestyle," Kurt L. Gottschall, Director of the SEC's Denver Regional Office said Wednesday. "The SEC will do all it can to hold these defendants accountable and ensure money is returned to those who were deceived."

The SEC's complaint, filed in federal district court in Colorado last Thursday, and unsealed Wednesday, charges all defendants with violating various antifraud provisions.

The SEC has also charged 20 relief defendants who allegedly received profits from the fraud.

The SEC's continuing investigation is being conducted by Jeffrey D. Felder and Tracy W. Bowen of the SEC's Denver Regional Office and supervised by Kimberly L. Frederick and Jason J. Burt. The litigation is being led by Stephen C. McKenna and Mark D. Williams and supervised by Gregory A. Kasper.

The SEC said Wednesday it appreciated the assistance of the U.S. Commodity Futures Trading Commission, the U.S. Attorney's Office for the District of Colorado, the Federal Bureau of Investigation, and the U.S. Marshals Service.

The SEC statement also thanked the U.K. Financial Conduct Authority,the Czech National Bank, the New Zealand Financial Markets Authority, the Securities Commission of The Bahamas, the Central Bank of Armenia, and the Cayman Islands Monetary Authority.

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