Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. Subject of a $125 Million Fraud Investigation, Restraining Order, & Asset Freeze
Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. are the subject of an emergency enforcement action, and the SEC has obtained a temporary restraining order and has frozen the assets of the three managers over their alleged fraudulent international trading program, according to an SEC Complaint under review by investor rights attorney Alan Rosca.
Investor rights attorney Alan Rosca, of the Rosca Scarlato LLC law firm, is investigating activity related to Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd.’s alleged fraud scheme. Investors who believe they may have lost money in activity related to Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. ’s alleged fraud scheme are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
The SEC has stated that the alleged scheme has put more than $125 million of investor funds at risk, the Complaint notes
Young, Stewart, and Sewall, through Mediatrix Capital, Blue Isle 1, and Blue Isle 2, from March 2016 to the present, allegedly raised over $125 million from investors in unregistered securities offerings by representing to investors that their money would be pooled and invested using the defendants’ allegedly highly profitable algorithmic trading strategy, the Complaint notes.
Said Defendants allegedly falsely claimed to investors that, from December 2013 through at least March 2019, their purported trading strategy had never had an unprofitable month and had returned more than 1,600%, the Complaint details.
The aforementioned defendants allegedly further made claims that their highly successful trading strategy had allowed Mediatrix Capital to accumulate assets under management of $225 million as of the end of 2018, the Complaint reports. None of these claims were allegedly true, the SEC states.
Michael Young, Michael Stewart, & Bryant Sewall Have Allegedly Misappropriated Over $35 Million since Mid-2016
Michael Young, Michael Stewart, and Bryant Sewall, in reality, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd, since mid-2016, have allegedly misappropriated more than $35 million of investors’ money by purportedly transferring it out of the entity defendants’ bank and brokerage accounts rather than using the money for trading, the Complaint notes.
Said defendants allegedly used investors’ money to purchase luxury properties and vehicles, and diverted more than $5 million of additional investors’ funds for other improper expenditures to perpetuate the alleged fraud, the Complaint states.
The SEC goes on to state that, when said defendants allegedly used the remaining portion of investors’ money for trading, the defendants’ trading consistently lost money – losing more than $18 million from its trading in 2018 alone, and, because of the defendants’ large misappropriation and trading losses, Mediatrix Capital’s assets under management are allegedly nowhere close to the amounts represented by the defendants, the Complaint reports.
The defendants, for example, at year-end 2018, allegedly represented that Mediatrix Capital had $225 million under management, but in reality, the firm allegedly had approximately $35.3 million in assets under management, or less than 16% of the amount claimed, the Complaint states.
Michael Young, Michael Stewart, & Bryant Sewall Allegedly Falsified Investors’ Account Statements to Show Fake Profits, & Purportedly Made Ponzi-like Payments to Investors
Michael Young, Michael Stewart, and Bryant Sewall, in reality, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd allegedly defrauded investors by repeatedly misrepresenting the profitability of their trading, falsifying investors’ account statements to show phantom profits, and purportedly made Ponzi-like payments to investors who opted to cash out their purported profits — all in order to prop-up the façade of a profitable trading operation , the Complaint reports.
The aforementioned defendants allegedly made numerous additional, material misrepresentations and omissions to investors regarding the supposed transparency of Mediatrix Capital’s trading, as well as third party involvement in verifying trading results, the Complaint states.
The defendants also allegedly falsified investors’ account statements and manipulated trading results to reflect profits rather than the actual losses resulting from their trading, and said defendants also purportedly falsely claimed that Mediatrix Capital’s trading results had already been audited, the Complaint reports.
Said defendants also allegedly made numerous misleading statements implying that Blue Isle 1 and Blue Isle 2 were independent, third-party administrators that received Mediatrix Capital’s trading data directly from brokerage firms before reporting it to investors, the Complaint notes.
The aforementioned defendants’ misrepresentations, omissions, and other fraudulent conduct allegedly had the same goal and effect: provide investors with a false picture of trading profitability and a false sense of security, so as to induce additional investment to perpetuate the fraud, the Complaint states.
The defendants’ alleged continued misappropriation and accelerating trading losses have driven their fraud to the brink of collapse, and Mediatrix Capital’s most recent bank and brokerage account records indicate that only a portion of investors’ funds remain, likely saddling investors with tens of millions of dollars in losses, the Complaint reports.
As a result of the conduct described herein, said defendants allegedly violated Sections of the Securities Act and Sections of the Securities Exchange Act, the Complaint notes.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
Securities Lawyer Investigating
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd.’s alleged fraud scheme. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, and has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. ’s alleged fraud scheme may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
