In what came across as a massive cryptocurrency scam, a former broker with the New York Stock Exchange (NYSE), Michael Ackerman is now being chased by investors, whom he allegedly scammed of $33 million. Ackerman, along with former Wells Fargo Advisors employee James Seijas and Florida surgeon Quan Tran was charged last month for the scam.
More than 100 of these investors have formed a legal representing body known as the Q3 Investment Recovery Vehicle, and are claiming their funds back. As per reports, these alleged scammers were operating from an enterprise named Q3 I LP, which lured investors into a trading algorithm, promising them high returns. Ackerman himself developed the algorithm, which he previously used in the traditional stock markets. However, the same algorithm ended by being pretty useful in the crypto space as well.
The Securities and Exchange Commission (SEC) complained that Ackerman invested only $10 million into his so-called proprietary trading algorithm, out of the total amount that he raised from investors. The SEC also stressed on the fact that Ackerman could only generate bare minimum returns for those investors.
However, Ackerman has supposedly tweaked account information to show 15% enhanced returns. Moreover, Q3 Holdings LLC under which these men were operating the scam also charged a hefty licensing fee from investors to grant access to the said trading algorithm. This generated an additional income of around $4 million. As of now, Ackerman is facing charges from federal prosecutors in regard to fraud and money laundering.
Ackerman has allegedly used investors’ money in buying a 150+ acre plot in Montana and a $3 million beach house in Florida, apart from luxury cars and jewelry.