BitSports securities fraud C&D from Texas
BitSports has been issued an emergency cease and desist order from the Texas State Securities Board (TSSB).
TSSB issued the November 9th order after confirming BitSports is committing securities fraud.
As reviewed here on BehindMLM in May, BitSports was an AI bot Dubai-based Ponzi scheme.
BitSports collapsed last month, which is noted in TSSB’s order;
BitSports.ai recently announced it was the victim of a cybersecurity incident impacting nearly 55,000 of its clients. It claims the malicious actor stole digital assets from its wallets.
The firm suspended client withdrawals and then suspended its operations.
In addition to naming BitSports’ CEO Hugo Rodriguez and executives Carlos Sarmiento and Denissa Salas…
…TSSB also names promoters Josh Berman and Sean Kelly.
Together, Berman and Kelly promoted BitSports through their company Berman Investment Group (BIG).
In addition to having a website, BIG also has a corresponding YouTube channel. On the Berman Investment Group YouTube channel, multiple fraudulent MLM investment scams are promoted:
Following their own investigation into BitSports, TSSB concluded the company’s investment scheme has
not been registered with the Securities Commission as dealers or agents at any time material hereto.
Parties offering (BitSports’) Arbitrage Memberships in or from Texas are offering unregistered securities in violation of Section 4003.001 of the Securities Act.
Parties offering (BitSports’) Arbitrage Memberships in or from Texas are offering securities in violation of Section 4004.051 of the Securities Act unless the parties registered as dealers or agents.
Several disclosure failings related to BitSports’ purported business operations are also cited.
With respect to the Berman Investment Group, Josh Berman and Sean Kelly, TSSB cites disclosure failures related to
- the business repute and qualifications of BIG, Berman and Kelly;
- the experience and success of BIG, Berman and Kelly;
- MLM commissions earned by Berman and Kelly for recruiting consumers into fraudulent investment schemes; and
- the “criteria used to identify, analyze, and determine whether to promote investments”
TSSB goes on to order BitSports, its executives, Berman, Kelly and BIG to
immediately CEASE AND DESIST from offering for sale any security in Texas until the security is registered with the Securities Commissioner or is offered for sale pursuant to an exemption from registration under the Texas Securities Act.
It is further ORDERED that Respondents immediately CEASE AND DESIST from acting as securities dealers, agents, investment advisers, or investment adviser representatives in Texas until they are registered with the Securities Commissioner
or are acting pursuant to an exemption from registration under the Texas Securities Act.
It is further ORDERED that Respondents immediately CEASE AND DESIST from engaging in any fraud in connection with the offer for sale of any security in Texas.
It is further ORDERED that Respondents immediately CEASE AND DESIST from offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public.
BitSports’ website is still available even though the Ponzi scheme has collapsed.
BIG’s website and YouTube channel were both accessible at time of publication. BIG also has a private corresponding FaceBook page, currently sitting at over 1,200 members.
Admins of the group include Josh Berman, Raphael Peter, Scot Craycraft, Brandon Roberts, Deitt Trip III, Melissa Berman and Shante Parris.