Security News > 2023 > August > SEC fines fintech crypto fund that promised 2,700% returns

A New York fintech biz is set to pay $1 million in fines under a US Securities and Exchange Commission order that claims it advertised "Annualized" returns on Titan Crypto of up to 2,700 percent, a number based on a "Purely hypothetical account."

Titan Global Capital Management provided investment strategies to clients and prospective clients solely through a mobile app, the SEC said.

According to the Wall St watchdog, Titan neglected to tell its retail investors that the "2,700 percent" returns were extrapolated from a hypothetical period of just three weeks during which no actual trading occurred.

Titan did not disclose in the advertisements that the 2,700 percent annualized return was based on a purely hypothetical account in which no actual trading had occurred, that this annualized return had been extrapolated from a period of only three weeks, that the hypothetical return for this three-week period was calculated at 21 percent, that the projected 2,700 percent annualized return was based on the assumption that the Titan Crypto strategy would continuously generate a 21 percent return every three weeks for an entire year, or Titan's views as to the likelihood that this assumption would bear out.

Osman Nawaz, SEC Chief of Enforcement's Complex Financial Instruments Unit, said in a statement: "Titan's advertisements and disclosures painted a misleading picture of [certainty] of its strategies for investors."

The SEC said: "Without admitting or denying the SEC's findings, Titan agreed to a cease-and-desist order, a censure, and to pay $192,454 in disgorgement, prejudgment interest and an $850,000 civil penalty that will be distributed to affected clients."

News URL

https://go.theregister.com/feed/www.theregister.com/2023/08/22/sec_titan_fintech_fine/