Former NYSE Broker Ordered to Pay $54 Million in Penalties for Crypto Fraud
Former NYSE broker Michael Ackerman has been ordered to pay $54 million in penalties for running a cryptocurrency fraud scheme, defrauding investors and misusing funds.
Key Points
- Former NYSE broker Michael Ackerman has been ordered to pay $54 million in penalties for running a cryptocurrency fraud scheme.
- Ackerman defrauded nearly 150 investors and raised $33 million by making false promises of high returns.
- The final order from the CFTC includes $27 million in restitution to victims and an additional $27 million as a civil monetary penalty.
- Ackerman used false accounting details and mislead investors about the fund’s portfolio, using a significant portion of the raised funds for personal gain.
A federal court has ruled that former New York Stock Exchange (NYSE) broker Michael Ackerman must pay $54 million in penalties for running a cryptocurrency fraud scheme, according to a press release from the Commodity Futures Trading Commission (CFTC).
The CFTC revealed that a judge at the Southern District of New York court has also banned Ackerman from trading in any market supervised by the financial watchdog.
JUST IN: 🇺🇸 NY court orders former NYSE broker Michael Ackerman to pay $54m in damages/penalties for fraudulent crypto trading scheme.
— Coingraph | News (@CoingraphNews) June 28, 2023
Ackerman Charged with Defrauding Investors
In 2020, Ackerman was charged with defrauding nearly 150 investors and raising $33 million by making false promises of high returns. Initially, he pleaded not guilty but changed his plea in September 2021.
The CFTC has announced that the final order, signed on June 13, effectively closes the enforcement case against Ackerman.
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Ackerman to Pay $54 Million in Penalties
According to the CFTC, Ackerman has been ordered to pay $27 million in restitution to defrauded victims and an additional $27 million as a civil monetary penalty for his involvement in the crypto fraud.
The fraud occurred between August 2017 and December 2019 through Ackerman’s company, Q3 Holdings. The firm promised investors monthly returns of 15% on their investments by using a proprietary trading algorithm to trade Bitcoin and other cryptocurrencies.
The CFTC estimates that Ackerman raised at least $33 million from over 150 investors during this period.
Ackerman’s False Accounting Details
The CFTC has also revealed that Ackerman presented false screenshots and accounting statements to mislead investors about the actual status of the fund’s portfolio. His partners, former Wells Fargo Advisors employee James Seijas and Florida general surgeon Quan Tran, were also misled and unaware of the true asset values.
Contrary to Ackerman’s claims, only $10 million of the raised funds were actually invested. The remaining amount was used by Ackerman for personal gain, including luxury items such as cars, jewelry, and a $3 million Florida beach house.
