🌋 SEC Charges Texas Mining Company with Fraud
posted 26 Apr 2024
The U.S. Securities and Exchange Commission (SEC) has charged the Texas-based mining company Geosyn and its founders, Caleb Ward and Jeremy McNutt, for engaging in fraudulent activities.
According to the SEC, the company duped 60 investors out of approximately $5.6 million by providing false information on its website. Geosyn concealed from new investors that previous investors had not received the promised mining equipment. Additionally, the company misrepresented the terms of its energy supply contracts, claiming costs were 40–50% lower than actual rates.
To mask these discrepancies and the lack of profits, the founders periodically distributed Bitcoin to investors. Despite only generating $320,000 from mining operations, they distributed $354,500 to investors. To cover the shortfall, McNutt was compelled to purchase Bitcoin personally.
The SEC also accuses the founders of misappropriating $1.2 million from the company for personal expenses, including family vacations and high-end purchases.
The regulator is now seeking to impose fines on the company and its founders, prohibit them from conducting future business, and compel them to compensate for the losses incurred.
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