SEC Emergency Action Halts Brothers’ Cryptocurrency Offering Fraud

The Securities and Exchange Commission today announced that it filed an emergency action and obtained a temporary restraining order and asset freeze against two Pennsylvania-based brothers and three entities they control to stop an offering fraud and the misappropriation of investor proceeds. According to the SEC's complaint, from at least July 2019 through May 2020, brothers Sean Hvizdzak and Shane Hvizdzak offered securities in a private fund that purported to invest in digital assets by misrepresenting fund performance, fabricating financial statements, and forging audit documents. For example, the complaint alleges that the Hvizdzaks misrepresented in marketing materials that the fund earned 100.77% and 92.90% on its investments during the third and fourth quarters of 2019, when in fact the fund actually lost money in those quarters.