By Jonathan Stempel
(Reuters) - Mediatrix Capital said its clients went five years without a single monthly loss. It said it won an award as top global asset manager for its returns over that time. A group in Monaco declared Mediatrix the Best Family Office Asset Manager.
The U.S. Securities and Exchange Commission calls Mediatrix a Ponzi-like fraud.
In a statement on Wednesday, the SEC said it obtained a temporary restraining order and emergency asset freeze against three Mediatrix principals to stop a fraudulent international trading program that put more than $125 million of investor money at risk.
The SEC said Mediatrix and its principals Michael Young, Michael Stewart and Bryant Sewall had since March 2016 raised money from investors by representing that their money would be invested in an algorithmic trading strategy that had returned more than 1,600% since December 2013.
In reality, the SEC said the strategy was a money-loser, racking up more than $18 million of losses in 2018 alone, and the defendants diverted more than $35 million for their personal use, including to buy jewelry, three Land Rovers and more than $12 million of real estate.
The defendants also made "Ponzi-like payments" to meet investors' redemption requests and conceal the losses, according to the SEC complaint filed with the federal court in Denver. The SEC is seeking civil fines and to recoup ill-gotten gains.
Young has a home in Colorado, while Mediatrix operates under the jurisdiction of the Bahamas, the SEC said.
Mediatrix did not immediately respond to requests for comment on the defendants' behalf. Lawyers for Mediatrix, Young and Sewall did not immediately respond to similar requests. It was not immediately clear whether Stewart has retained a lawyer.
On its website, Mediatrix calls itself "an industry leading independent trading advisor of foreign currency FX spot and OTC FX options."
Mediatrix said Young in June 2018 accepted an award in Monte Carlo from the Monaco Single and Multi-Family International Association for Best Family Office Asset Manager, in the presence of "an A-list group of 400+ billionaires, sheikhs, royal families and business leaders."
In January, Mediatrix said it had won the Top Global Asset Manager Award for measured net returns over five years from Autumn Gold, a commodity trading advisor information service.
The case is SEC v Mediatrix Capital Inc et al, U.S. District Court, District of Colorado, No. 19-02594.