The Securities and Exchange Commission (SEC) has filed an emergency action and obtained a temporary restraining order and asset freeze against Shawn C. Cutting. The SEC alleges that Cutting raised millions of dollars by falsely claiming to be a financial adviser with securities licenses, overstating investment returns, and misappropriating money received from investors.
The SEC claims that from October 2017 through at least May 2020, Cutting raised at least $6.9 million from over 450 investors by representing that he would pool investor monies into a fund that invested in various digital assets. Cutting allegedly received money from investors, including Crypto Traders Management, LLC, Cutting’s wife Janine M. Cutting, and three entities Cutting controls, Golden Cross Investments, LLC, Lake View Trust, and Tyson Trust.
The complaint also alleges that Cutting misappropriated at least hundreds of thousands of dollars of the funds raised from investors, using the money to pay for personal expenses including home improvements, cars, and his daughter’s wedding.
Cutting allegedly convinced investors that he was trading profitably and induced them to make additional investments by emailing investors fictitious updates that described purported trading and investment returns, at times touting gains exceeding 50% in a single month. The complaint further alleges that Cutting prolonged the fraud by making at least $760,000 in Ponzi-like payments to investors.
The complaint, filed in the U.S. District Court for the District of Idaho.