SEC obtains entry of default against orchestrator of cryptocurrency scheme
The default of Michael Ackerman, who defrauded investors via Q3 Trading Club and Q3 I LP, was noted today by the New York Southern District Court.
The United States Securities and Exchange Commission (SEC) has managed to secure entry of default against Michael Ackerman, accused of running a large-scale cryptocurrency scam.
The entry of default was signed earlier today, with the clerk of the New York Southern District Court noting that the defendant has not filed an answer to the SEC’s complaint.
Let’s recall that, in February 2020, the SEC filed charges against Ackerman who allegedly orchestrated a digital asset scheme that defrauded approximately 150 investors, including many physicians.
The SEC alleges that Michael W. Ackerman, along with two business partners, raised at least $33 million by claiming to investors that he had developed a proprietary algorithm that allowed him to generate extraordinary profits while trading in cryptocurrencies. According to the SEC’s complaint, physicians in particular made investments in two entities Q3 Trading Club and Q3 I LP when they were introduced to the digital currency investment opportunity by one of the business partners who also was a physician.
The SEC’s complaint alleges that Ackerman misled investors about the performance of his digital currency trading, his use of investor funds, and the safety of investor funds in the Q3 trading account. The complaint further alleges that Ackerman doctored computer screenshots taken of Q3’s trading account to create the illusion that Q3 was highly invested in cryptocurrencies and was extraordinarily profitable, holding assets of as much as $310 million.
In reality, as alleged, at no time did Q3’s trading account hold more than $6 million and Ackerman was personally enriching himself by using $7.5 million of investor funds to purchase and renovate a house, purchase high end jewelry, multiple cars, and pay for personal security services.
As FinanceFeeds reported last week, the United States Commodity Futures Trading Commission (CFTC) also managed to secure entries of default against Michael Ackerman and the entities he founded, Q3 Holdings, LLC and Q3 I, LP, at the New York Southern District Court.
The certificates of default were issued on July 22, 2020. The defendants have failed to respond to the CFTC’s complaint and their default was noted by the Court.