SEC charges BG Wealth, DSJ Exchange over alleged $130 million investor fraud scheme

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SEC charges BG Wealth & DSJ

Highlights

SEC charged BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd with a $130 million fraud targeting tens of thousands of U.S. retail investors via false AI crypto trading claims.
Both companies allegedly filed false Form ADV and Form D documents with the SEC, used fake SEC-branded certificates, and employed Ponzi-like tactics to gain investor trust.
The SEC seeks permanent injunctions, disgorgement, and civil penalties, noting cross-jurisdictional cooperation and warning investors about scammers misusing exempt adviser filings.

Complaint details and alleged fundraising tactics

As reported by the U.S. Securities and Exchange Commission, BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd are charged with orchestrating a fraud scheme that targeted tens of thousands of retail investors in more than 40 U.S. states and multiple U.S. territories.

The SEC says the two foreign-operated entities promoted a supposed wealth-sharing program by promising extraordinary, risk-free returns generated by claimed AI-produced trading signals for crypto asset trading. The agency alleges BG Wealth also falsely claimed to be the world’s largest hedge fund, to be registered with the SEC as an investment adviser, and to be partnered with DSJ Exchange as a licensed and secure crypto trading platform.

Regulators allege those representations were unsupported and that the companies sought to appear legitimate by filing false Form ADV and Form D documents with the SEC. Those filings were publicly visible and were shared with investors as purported proof that the agency had licensed or approved the businesses.

Laura D'Allaird, chief of the SEC Enforcement Division's Cyber and Emerging Technologies Unit, says the alleged scheme used multiple communications channels, including social media, encrypted messaging services, weekly live videoconferences and a mobile app, to keep investors engaged. She says the defendants also displayed fake certificates bearing the SEC's seal and made periodic payments to some investors in what the agency describes as a Ponzi-like tactic, while misappropriating the remaining funds.

Legal action and broader investor warning

The complaint, filed in the U.S. District Court for the Northern District of California, charges BG Wealth and DSJ Exchange with violating antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. BG Wealth also faces charges under Sections 204(a) and 207 of the Investment Advisers Act of 1940.

The SEC is seeking permanent injunctions, disgorgement with prejudgment interest and civil penalties against both defendants, as well as conduct-based injunctions against BG Wealth. Separately, the Form ADV filed by BG Wealth and the Form D filed by DSJ Exchange have been removed from the Commission's website.

The agency says its Office of Investor Education and Assistance has issued alerts warning that scammers are using exempt reporting adviser filings to create a false impression of legitimacy and lure investors with false claims of SEC registration. The SEC is encouraging investors to use Investor.gov to review the background of anyone offering or selling an investment.

The regulator also says it appreciates assistance from the Alberta Securities Commission and several state authorities, including agencies in Hawaii, Texas, Utah, Washington and Wisconsin, underscoring the cross-jurisdictional nature of the investigation.

In our earlier report on the Bank of England’s push for “bare metal” recovery planning, we covered regulators’ concerns that AI is increasing the scale and complexity of cyber threats to banks and critical financial infrastructure. The article explained why supervisors want lenders to develop independent recovery options for core services, arguing that defenses alone are no longer sufficient as AI-enabled attacks become more sophisticated.

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