Mediatrix Capital

Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. Allegedly Operated a $125 Million Fraud Scheme; SEC Investigating 

Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd., allegedly operated a $125 million fraud scheme, according to an SEC Complaint under review by investor rights attorney Alan Rosca. 

Investor rights attorney Alan Rosca, of the Goldman Scarlato & Penny PC law firm, is investigating activity related to Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd.’s alleged fraud scheme. Investors who believe they may have lost money in activity related to Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd.’s alleged fraud scheme are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.

Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. are also the subject of an emergency enforcement action, and the SEC has also acquired a temporary restraining order as well as an asset freeze of the three aforementioned managers over their alleged fraudulent international trading program, the SEC reports

Young, Stewart, and Sewall, via Mediatrix Capital, Blue Isle 1, and Blue Isle 2, allegedly raised over $125 million from investors in unregistered securities offerings by representing to investors that their money would be brought together and purportedly invested using the aforementioned defendants’ allegedly highly profitable algorithmic trading strategy, the SEC states

Said defendants allegedly made false statements to investors that, from December 2013 through at least March 2019, their trading strategy had never had an unprofitable month and had returned more than 1,600%, the SEC notes. The aforementioned defendants allegedly further claimed that their highly successful trading strategy had enabled Mediatrix Capital to accumulate assets under management of $225 million as of the end of 2018, the SEC reports

None of this was true, the SEC notes

Kurt Gottschall, director of the SEC’s Denver regional office, has made the following statement:

We allege that this scheme has resulted in tens of millions of dollars in investor losses, in part, to fund defendants’ luxurious lifestyle.

Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. Allegedly Misappropriated over $35 Million of Investors’ Money 

Young, Stewart, and Sewall, via Mediatrix Capital, Blue Isle 1, and Blue Isle 2, since mid-2016, allegedly have misappropriated over $35 million of investors’ money by transferring it out of the Entity defendants’ bank and brokerage accounts as opposed tousing the money for trading, and said defendants allegedly used investors’ money to purchase luxury properties and vehicles, and diverted more than $5 million of additional investors’ funds for other improper expenditures to perpetuate the fraud, the SEC states.

The SEC goes on to report that, even when the aforementioned defendants allegedly used the remaining portion of investors’ money for trading, said defendants’ trading consistently lost money – losing more than $18 million from its trading in 2018 alone, the SEC states

Because of the aforementioned defendants’ large misappropriation and trading losses, Mediatrix Capital’s assets under management are far away from the amounts represented by said defendants, the SEC details

For example, at year-end 2018, said defendants allegedly represented that Mediatrix Capital had $225 million under management, when in reality, the firm had approximately $35.3 million in assets under management, or less than 16% of the amount claimed, the SEC reports.

Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd. Allegedly Defrauded Investors by Misrepresenting Their Purported Profitability

Young, Stewart, and Sewall, via Mediatrix Capital, Blue Isle 1, and Blue Isle 2, in order to induce investment into their failing trading strategy, allegedly defrauded investors by purportedly repeatedly misrepresenting the profitability of their trading, falsifying investors’ account statements to show phantom profits, and making Ponzi-like payments to investors who opted to cash out their profits — all in order to prop-up the façade of profitable trading, the SEC notes

The aforementioned defendants allegedly made numerous additional, material misrepresentations and omissions to investors regarding the supposed transparency of Mediatrix Capital’s trading, as well as third party involvement in verifying trading results, and said defendants also allegedly falsified investors’ account statements and manipulated trading results to reflect profits rather than the actual losses resulting from their trading, the SEC reports.  

Said defendants also allegedly made false claims that Mediatrix Capital’s trading results had received an audit, and also allegedly made numerous misleading statements implying that Blue Isle 1 and Blue Isle 2 were independent, third-party administrators that received Mediatrix Capital’s trading data directly from brokerage firms before reporting it to investors, when in fact, the aforementioned defendants allegedly owned and controlled the Blue Isle entities and manipulated the trading data it conveyed to investors, the SEC notes

As a result of the conduct described herein, the SEC states, said defendants allegedly violated Sections of the Securities Act and Sections of the Securities Exchange Act.

Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints mentioned in this article, unless otherwise indicated.

Securities Lawyer Investigating

The Goldman Scarlato & Penny PC law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd.’s alleged fraud scheme. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, and has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.

Investors who believe they lost money as a result of Michael Young, Michael Stewart, and Bryant Sewall, and their companies Mediatrix Capital, Blue Isle Markets Inc., & Blue Isle Markets Ltd.’s alleged fraud scheme may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at rosca@lawgsp.com, or through the contact form on this webpage.