SEC Charges Two Entities in $130 Million Fraud Scheme

The Securities and Exchange Commission filed a complaint in the United States District Court for the Northern District of California charging BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd, foreign-operated entities incorporated in Colorado, with a fraud scheme that raised more than $130 million from tens of thousands of retail investors. The complaint alleges the defendants induced investors in more than 40 U.S. states and multiple U.S. territories to join a purported "wealth-sharing program" by promising extraordinary, risk-free returns from crypto-asset trading signals.

According to the complaint, the defendants created the appearance of legitimacy by submitting false Form ADV and Form D filings that were publicly viewable and shared with investors as proof of SEC registration. They promoted the scheme through social media, encrypted messaging, weekly live videoconferences, and a mobile app, displayed fake SEC certificates, and made periodic payments to select investors while misappropriating the remaining funds.

The complaint alleges violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and for BG Wealth, violations of Sections 204(a) and 207 of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties against both defendants, and conduct-based injunctions against BG Wealth.

The SEC's Office of Investor Education and Assistance issued alerts warning that scammers are using exempt reporting adviser filings to create a false impression of legitimacy. The Form ADV filed by BG Wealth and the Form D filed by DSJ Exchange have been removed from the Commission's website. The agency thanked the Alberta Securities Commission and several state securities regulators for their assistance.