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matthew krueger seaquake krugs consulting

Fraudster CFO Re-Invents Himself; Former Seaquake Executive Matt Krueger Has New CV

Matthew J. Krueger, who until October 2022 had displayed himself on both LinkedIn and the Seaquake.io website as the Chief Financial Officer for “digital asset infrastructure firm”, Seaquake.io, an enterprise that specialized in bilking investors out of their money, has apparently made efforts to re-invent himself and ‘erase’ his role for Seaquake.io, as his bio on that firm’s website, as well as that of the firm’s CEO and convicted felon Andrew R. Katz and that of “CTO” Dylan Knight were removed last month.

Krueger has apparently now re-invented himself as a venture building, consulting and financial modeling expert and offers his services through a newly-created entity called Krügs Consulting.

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), “CFO” Matthew J. Krueger (c) and CIO Dylan Knight

Krueger’s updated bio on LinkedIn suggests that he is a finance consultant and ‘venture builder’ under the auspices of “Krugs Consulting“. His LinkedIn bio suggests that he has operated this entity since 2018, although prior to the LinkedIn update, he made no mention of this entity, which is not registered to do business in California, or any other jurisdiction.

In his bullet-pointed prior roles and responsibilities, Krueger advertises that he is “an expert in financial models, fintech enterprises, cash settlement, and managing investor expectations”, and that he “built the financial model for a startup’s crypto mining operations for SOSV Chinaaccellerator.” He also says he was a former Head of Finance for Venmo.

Causing those who are familiar with the Seaquake Scoundrels to smirk. The Krugs Consulting website linked to Krueger’s LinkedIn profile does not display a bio of any principals of the firm, yet it indicates having offices in San Francisco, Wyoming, and Estonia. No great surprise as to San Francisco, as this is where he lives. Wyoming? Matt Krueger has proven to be fluent in establishing corporate entities (and closing them), as he has created a number of shell companies on behalf of Seaquake that are registered in Wyoming. Yet there is no Krugs Consulting registered with the State of Wyoming. Office in Estonia? Perhaps that is a favored place to domicile a crypto account these days?

Matthew J. Krueger, former CFO of Seaquake, now “principal of Krügs Consulting”

https://sosv.com/company/seaquake/https://sosv.com/company/seaquake/gain, he makes NO reference to his 4-year tenure as CFO of Seaquake (or “Seaquack” as some refer to it), yet the SOSV reference on his updated LinkedIn profile is a tell, as that China-based ‘venture firm’ went to get great lengths to promote the fact it had invested in Seaquake in 2020 (well after news of Seaquake scamming other investors became a matter of public record.) Though few are familiar with SOSV Chinaaccellerator, one can guess that they enable scammers as easily as Sequoia Capital did for Sam Bankman-Fried and his FTX Crypto Exchange.

Regarding Krueger’s Venmo role, a seasoned background check expert will tell you that Venmo HR records indicate he was terminated for cause.

So, in view of Krueger’s role at Seaquake, those seeking an expert in money laundering via off-shore crypto accounts, or how to open a bank account using other people’s identities, or those hoping for a playbook on how to craft fraudulent financial statements who can help perpetuate investor fraud schemes would find Mr. Krueger to be just the kind of co-conspirator for your next initiative.

ftx-exchange-sam bankman-fried

FTX Crypto Exchange Debacle Simply Explained

Sam Bankman-Fried (aka “SBF”) Fries Clients and Customers

FTX Crypto Exchange Bankruptcy Explained; Investors Loss Estimated at $2bil; Exchange Customers Loss Estimated at $4bil-$5bil (so far..)

Comparisons Made to Lehman Brothers Scandal; Sam Bankman-Fried Scheme More Similar to Jon Corzine Shenanigans when he ran MF Global into the ground.

FTX & Alameda Research Found Sam Bankman-Fried with Carlyle Group Co-Founder and Billionaire David Rubenstein

By now, the travails and debacle of FTX Cryptocurrency Exchange, established by MIT wunderkind and former Jane Street Capital trader Sam Bankman-Fried aka “SBF”, has sucked up more oxygen in the media landscape than 1000x the electricity needed to mine $5trillion worth of crypto / craptocurrency*.  

(* Editors note: MarketsMuse hereby petitions the financial industry, the media, and all others to now refer to “Crypto Industry” as “Crapto Industry”; and we have secured trademarks for the new phrase, as well as the trademark for “CraptoCoins”).

As of this writing, Google has counted more than 120 million search inquiries for the search term Sam Bankman-Fried and 6,500,000 search inquiries for “FTX”; the former far eclipsing the 30 million searches for “FM Global Crisis” and the 11 million queries for “Lehman Crisis”, the story that profiled Lehman Brothers collapse, the poster-child for the 2007-2008 global financial crisis. At this pace, “FTX” queries will dwarf the 220 million searches on Google re: “Global Financial Crisis 2008”.

Shocked??

But, as pictured below, this ain’t the first and it won’t be the last financial scandal. Not by a long shot. When considering this generation’s more recent protagonists, why would anyone be shocked??

According to the assortment of news reports, a cohort of 80+ institutional investors who manage respective pension fund and HNW client assets, along with a handful of individual celebrity investors (e.g. Meta’s Mark Zuckerberg, Millenium Management’s billionaire founder and chairman, Israel Englander, hedge fund legend Paul Tudor Jones, Shark Tank star, Kevin “Mr. Wonderful” O’Reilly, and football legend/investor Tom Brady), had deployed more than $2bil to either FTX entities, and/or SBF’s proprietary trading firm, Alameda Research, both enterprises entirely controlled by SBF.

Former Jane Street trader and FTX Founder Sam Bankman-Fried aka “SBF”

“FTX is the high-quality, global crypto exchange the world needs, and it has the potential to become the leading financial exchange for all types of assets. Sam is the perfect founder to build this business, and the team’s execution is extraordinary. We are honored to be their partners.” — Alfred Lin, partner at Sequoia Capital

So, MarketsMuse editors have attempted to consolidate the coverage and unpack the events that inspired the venture capital’s ‘smartest investors’ (including Altimeter Capital to BlackRock, Greylock, Insight Partners, Lightspeed Ventures, Ontario Teachers Pension Plan, Pantera Capital, Sequoia Capital, Softbank, Temasek Holdings, Dan Loeb’s Third Point Ventures, and Thoma Bravo to disregard any standard or semblance of due diligence before they parted with their client’s money.

“We have watched with excitement as Sam and the FTX team have successfully built the most cutting-edge, sophisticated cryptocurrency exchange in the world. While this has been an incredible accomplishment in itself, their commitment to making a positive impact on the world through their business is what sets the company apart. We are thrilled to partner with FTX on their next phase of growth as they create a new ecosystem for crypto.” — Orlando Bravo, founder and managing partner at Thoma Bravo

In the simplest terms, all of these investors deployed their clients’ money because they all determined (or were told) that SBF was a genius trader who earned $100mil for himself while working for HFT firm Jane Street, and then left to set up his own firm, where he made himself into a billionaire by buying and selling crapto currencies. Believing he could build a better mousetrap for people to trade crapto, he took some of his profits to build a “world-class crapto currency exchange.” That exchange, FTX, quickly attracted as many as one million retail customers, all of whom were convinced they could make fortunes via “yield farming” (a bizarre means by which investors attempt to earn Madoff-level interest on their money via purchasing and then lending out ‘coins’ to others), or buying and selling a broad assortment of ‘currencies’ that dominate the Crapto Industry. 

Keep in mind, that the many “industry experts”, outspoken advocates, and the several dozens of ‘asset managers’ overseeing billions of dollars of investors’ money, who “specialize in digital assets”, all these people buy and sell what most industry insiders acknowledge to be nothing more than air bubbles.

A Leading Crypto Trader

According to one such insider (who has held corporate communications roles for several firms in the crapto industry, and who asked to remain nameless, for obvious reasons), “80% of the firms in this business laugh behind the backs of their investors every day; they are getting outsized compensation to simply speculate in tens of dozens of different valueless ‘tokens’ that they [the asset managers] know to be no more akin to being currencies than farts are.”

Added the insider, “just like traditional hedge funds, they get paid hefty management fees, and a fat percentage of the ‘profits’, but unlike traditional hedge funds that invest across a spectrum of legitimate assets and legitimate, industry-regulated derivatives, they are buying and selling the farts in a completely unregulated environment, and when they lose, its no skin off their back. In the interim, they promote themselves (using their clients’ money) at lavish industry conferences and boondoggles, they host six-figure corporate offsites, they sponsor sports teams, all to the expense of investors who are told they can beat the returns of the best legitimate hedge funds in the world.”

Sam Bankman-Fried, aka “SBF”

What happened at FTX? It is pretty simple to understand for those who understand the regulated market structure.

The best analogy is that of commodity trading advisor MF Global, which was torched in 2011 by its CEO and former Goldman Sachs CEO Jon Corzine. The one-time US Senator and one-time New Jersey Governor stepped in to run one of the commodity trading industry’s oldest and largest brokerage firms (previously known as Man Financial), and soon thereafter, he was accused of using customers’ money to backstop highly-leveraged proprietary trades the firm made in emerging market debt and exotic fixed income products. When the leveraged trades went sour, the firm dipped into customer account balances (to the tune of $1bil) to meet margin calls from an assortment of counter-parties, and when rumors heightened as to the precarious nature of the firm’s proprietary trading activities, customers flocked en masse to get their funds out of the firm. But the funds were not in their accounts, as they had been pledged as collateral by the financial alchemists at MF Global.

Jon Corzine, MF Global Alchemist

To a great extent, the same thing happened to FTX and SBF. His proprietary trading firm, Alameda Research, was making outsized bets in crapto currencies, including buying his own firm’s private label crapto, “FTT”, which he used as ‘currency’ to purchase control of an assortment of competing firms, including a list of failing firms in the industry that went belly-up in the midst of this year’s ‘crypto winter’.

The best part? NO internal risk management, no internal compliance, no industry regulators to wander in and interrogate any risk management systems, no adults in the room, and no industry clearing organizations that have any rules or procedures to govern the extent of leverage trading firms can use.

This is exactly what the industry, including the biggest player and notorious money-laundering platform Binance has been working towards since Day `1. “We don’t believe in following the regulations of other people, we are independent, we know better!”

Worth mentioning, despite MF Global operating in a completely regulated industry (regulated by CFTC), Corzine, started as a bond trader before becoming CEO at Goldman Sachs. Per above, before MF Global, he was Governor of New Jersey and also U.S. Senator for New Jersey; despite the shenanigans that took place at MF Global, he was never criminally prosecuted. He did pay a $5mil fine and was banned from serving in a leadership role for any CFTC-regulated firm.

One interesting factoid, current SEC Commissioner Gary Gensler was the CFTC Commissioner who approved the final outcome for Corzine.

ftx-exchange-sam bankman-fried

So, what are the key takeaways?

  • A bunch of smart-ass institutional managers who were so enamored with the media reports about wunderkind day trader and trading exchange innovator, SBF, failed in just about every way to perform their fiduciary duties of the FTX exchange, or to question what the relationship was between FTX and SBF’s proprietary trading firm, Alameda Research. Thanks to this gross oversight, these genius investors managed to collectively lose $2bil of their investors’ money. Again, it’s not coming out of those managers’ personal pockets, as they continue to earn 2% fees for ‘managing’ their client’s assets. As a representative for Sequoia stated this past week when informing that firm’s investors they would be writing down $214mil, “We are in the business of taking risk; some investments will surprise to the upside, and some will surprise to the downside.”   Mea Culpa?
  • The Crapto Industry is as completely unregulated as it is completely ‘decentralized’. There is no regulation, and few in the industry want there to be any regulatory oversight, other than perhaps US-domiciled Coinbase and US-domiciled Kraken, another exchange operator.

Case in point, Binance, the world’s largest ‘crypto exchange’ which is operated by freshly-minted billionaire Changpeng Zhao, (another guy who likes to be called by his acronym,“CZ”…What is with these guys? They all emulate Saudi Princes?!) has no credible corporate domicile unless you want to believe that companies registered in the Cayman Islands offer safeguards for investors. The only place on the planet where it is registered with a regulatory agency is France. That’s right, there is no regulatory agency anywhere other than in France that can credibly pursue Binance in the event they are subjected to accusations of bad behavior. Beaucoup de chance!

  • Crapto Currencies are just like farts. The only intrinsic ‘value’ is the hope that some idiot will pay more than you just did. That’s only presuming that someone else likes the smell of your fart and would like to buy it from you and bottle it for safekeeping. Your digital wallets might as well be in the Metaverse, and we know how that’s working out for Zuck.   
  • JP Morgan CEO Jamie Dimon has been right all along about the nefarious nature of crypto and bitcoin. Yes, he has since allowed JP Morgan to let customers buy and sell this stuff despite his trepidations. He simply gave in to the underlings who said “the customer is always right and if they want a financial product, it’s our obligation to offer it to them!” Fidelity did the same, they opened the gates to their brokerage firm customers to trade crypto this year.
Has Jamie Hit the Bullseye?
  • Mike Novogratz, another Goldman Sachs aka Squid University alumni, and also a former bond trader, almost blew up Fortress Investment Group all by himself, yet the firm was sold and he turned a $10mil payout into becoming a crapto pioneer and he accumulated a nearly $2b nest egg (down from $8.5b) inside of four years. That aside, most within the industry view him as a renegade, if not a complete knucklehead. His financial services firm, Galaxy Digital, is publicly traded on the Toronto Stock Exchange (GLXY.CN) and “Novo” is a poster boy for the bitcoin and crapto currency industry. He also managed to get clipped for $80mil in the FTX meltdown. According to those who know him well, he is said to be “certifiable”.
Mike Novogratz, Genius
The Mooch, “I guess I was duped..”
  • Anthony Scaramucci, another graduate of Squid University, and a former Trump Whitehouse spokesperson (for all of 9 days), is yet another celebrity poster child for the crapto industry. He runs a “fund of funds” called “Skybridge”, which is dedicated to taking investor money and buying crapto currrency. During the 2022 crapto meltdown, he managed to squander away hundreds of millions of dollars given to him by investors. Our favorite quote from him (so far) is, “In the future, DOGE may become a competitive store of value. If Bitcoin is digital gold, then DOGE has a chance to become digital silver,” 

When acknowledging that his investment fund, Skybridge, was one of the many who invested in FTX, he said, “Gee, I guess I was duped.” Mea Culpa?

  • Instead of “Crypto Industry”, the active phrase is now Crapto Industry, until such time as investors demand regulations that match those inherent to the US financial market system. We admit that will be a stretch; too many legislators are influenced by big-buck lobbyists who will always be able to buy votes on behalf of their billionaire constituents and industry trade groups that make big bucks at the expense of unwitting, uninformed, or ‘easily-duped’ investors of all shapes and sizes.

Frmr CFTC & Current SEC CommishGary Gensler
  • Gary Gensler is so far over his skis when it comes to advancing important and timely initiatives that will protect investors, its almost indescribable. Let’s not forget that Gensler was the CFTC Commissioner who oversaw the MF Global investigation and the final outcome was a get-out-of-jail-free card for Jon Corzine.
  • Aside from the simple fact that it will take a squadron of lawyers to figure out whether or not the SEC even has jurisdiction over the FTX scandal and SBF, the SEC has long proven itself to be toothless, without qualified resources, and overwhelmed by a tsunami of issues, crimes, and broken policies. Fraudsters and bad actors have little to fear from the SEC, if only because when they do assert laws have been broken, they are obliged to turn over their conclusions to the U.S. Department of Justice, which is equally devoid of prosecutorial talent, and their prosecutors are notorious for limiting their pursuit of criminals to only the biggest headline-grabbing cases.

Case in Point:

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io Scammers Andrew Katz (l), “CFO” Matthew Krueger (c) and CIO Dylan Knighthttps://www.marketsmuse.com/andrew-katz-seaquake-crypto-firm-still-scamming/

See Seaquake.io Scam website www.seaquake.io

When or if former Disney star Brock Pierce, yet another crapto currency billionaire, re-visits running for President, that’s when we all put our heads between our knees, grab our ankles, and contemplate moving to Kyiv.  

Finally, the explanation we offer regarding the FTX debacle is not intended to decry or debunk the blockchain industry, which is a completely different segment.

As best framed in a series of 2018 articles published at Prospectus.com, Its About Blockchain, blockheads, NOT Bitcoin” , blockchain and distributed ledger applications can offer meaningful utility to a range of enterprise solutions. The only ‘token’ component to these applications is the token (NOT COIN) is used to access applications. Those building enterprise applications rarely incorporate a component that places a value on the token, other than for its purpose of accessing software. Just like a subway token. That’s pretty simple.

Have a tip or a question? Contact Us

andrew-ross-katz-arrested-apr 1 2021 miami florida

Andrew Katz CEO of Fake Crypto Firm Seaquake Latest Felony Charges

Andrew Katz, the self-described CEO of “crypto trading firm” Seaquake.io, an individual whose escapades for defrauding investors and threatening those who have filed complaints against him have been profiled via this platform and other platforms for several years.

In addition to his ongoing efforts to dupe investors (with the latest attempt revealed below), Katz, who also uses the names Ross Katz and Stark Katz, and whose criminal arrest record extends nearly 10 years in four different states, is once again facing felony assault charges, this time in Miami, Florida. Miami-Dade County court records reveal that Katz faces multiple felony charges (Case # 13-2021-CF-005707-0001 ), including assaulting a police officer, resisting arrest, false imprisonment, and witness tampering. Despite a February 2022 conviction for assault in New York City (for which he purportedly failed to appear for sentencing), Miami-Dade County authorities released Katz, pending an upcoming court appearance, after he posted $75,000 bail.

seaquake-andrew-katz-crypto
Miami-Date Court Records
Case 13-2021-CR-006707-0001-XX

Since the April 2021 arrest in Miami, Katz has undertaken a social media campaign to publish multiple ‘interviews’ on blogs that enable people to promote themselves in exchange for a fee. To deflect negative stories, he has featured himself as a “successful crypto industry entrepreneur”. Per the lower left image, one individual who was recently solicited by Katz has cried “Bullshit!”

Below is the warning alert submitted by that individual in August 2022 via “Dirty Scam.com” a blog that ‘outs’ scamsters.

Editor Note: Katz has systematically rebutted similar accusations by impersonating victims and those associated with the victims by posting “comments” that include an array of defamatory and false allegations in an effort to discredit the accusers. At the same time, and despite Orders of Protection issued by courts in three jurisdictions, Katz has advanced retribution campaigns using burner phones and anonymous email accounts to harass, physically threaten and intimidate those who have brought charges against him. What a brave guy!

Andrew Katz of Seaquake recently contacted me for investment and loan purposes. We met at a party and talked about our businesses. He was interested in what I do.

After a few drinks, he suggested that he could help me in many ways in my business. Talking about his outstanding achievements, he said his company has a huge turnover and is a great player within the crypto industry.

He did tell me about his partner. If I correctly remember the name, it was Matthew Krueger. Although I did not meet this man, Andrew had painted his picture for me. We exchanged numbers and parted to our ways.

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), “CFO” Matthew Krueger (c), and “CIO” Dylan Knight

After a month, maybe, Andrew called. I recognized his voice right away. He said he was seeking some money for a considerable investment and would offer me a great deal in the profit earned. I was already excited about what he was offering.

But the amount was too huge. So, I asked him to arrange that kind of money for a couple of weeks. He was in a hurry and said that he could not wait. Then I asked him for two days. He sounded calm but still insisted on making it faster.

That was the red flag for me. In those few minutes, I did not ask about any paper works or any roadmap about the investment plan he had. But then it struck me mainly because he sounded too aggressive with the deal.

I started to Google him on the internet and his company. I was shocked that he was a fraud and a big liar. He has many felony charges to his name, and he is a wanted criminal. I called my lawyer right away and asked him to research this guy. To my surprise, he already knew Andrew.

I was saved. He told me everything about Andrew. This guy had felony charges for duping a family in Florida, assault charges, and whatnot. I blocked his number. However, I got a call from an unknown number after two days.

When I answered, it was Andrew. He started abusing me for leaving him in between a great deal after making promises. Without letting me speak, he went on talking rubbish. In the end, I shouted and asked him to calm down. I told him everything about what I knew.

He disconnected the call and never called back. This proves how great of a con artist this man is. He is a great liar and can easily make fake promises and boast about his non-existent company for hours. He can ruin your life without thinking about the consequences.

I give that to him. It is not easy to fool me, but he got me for some time. I am sure I had my lesson learned. And I am not going to believe anything he says anytime later. Stay away from this filth. He can burn your life instantly.

The individual who posted this experience did not provide his/her name and presumably posted anonymously in order to protect himself/herself from a barrage of retaliatory attacks from Katz.

All of this begs the question as to what other investors, including Crypto Industry Pioneer Brock Pierce and Blockchain Founders Fund, portrayed on the Seaquake.io website, have to say about all of this.

andrew-katz-seaquake-investors-fraud
*Individual names and images of Seaquake investors were recently removed Seaquake website

Editors Note: Efforts to secure comments from Miami-Dade County State’s Attorney Office, Manhattan District Attorney’s Office, Investor(s) Brock Pierce, and Blockchain Founders Fund principal Aly Madhavji were not responded to.

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September Cycles & Stock Market Pundits

September (and October) are typically the most negative time periods for stock market investors, and to illustrate this seasonal pattern, this year is no different. And, stock market pundits are once again in the limelight.

First, if you are a CNBC enthusiast, stop reading here. Our MarketsMuse team has voted unanimously for you to cut the chord if your investment horizon is longer than 1-4 days. The stock market pundits on that program are, for the most part, day traders whose holding period on a particular trade is shorter than the days you would keep milk in your ice box.

(Editor Note: THEIR DEFINITION OF “INVESTMENT” IS BASED ON ANNUALIZED RETURNS; if they can make 1% -2% inside of two or three days, the odds are you won’t get the memo that they took their profits and ran! The odds are greater still that any of those folks who appear daily will admit that they took a loss two days after their ‘pick’ plummeted by more than 5%.)

Second, if you do follow financial news headlines, you might already appreciate that every major investment bank, whether it be JP Morgan, Goldman Sachs, Morgan Stanley or Bank of America, has its own pundits whose internal views are diametrically opposed to each other. Why would you be a “High Networth Client” of any of these firms, when they can’t even agree internally on how to advise you?! Good question.

In June of this year, and then again in July, JP Morgan’s 66- year old Chairman & CEO Jamie Dimon, who is no novice when it comes to financial market assessments, was vociferous in his view that equities markets were facing a pending hurricane. Yet the same day in June that Dimon became a front page ‘bomb thrower’, his very highly-paid Chief Market Strategist Marco Kolanovick advised JP Morgan clients to “buy the dip”, as the 46-year-old ‘genius’ predicted US stocks (as measured by S&P 500) “will likely rally and close the year unchanged”.

At Bank of America, Chairman and CEO Brian Moynihan (62 years old) has remained an ardent bull throughout the ups and bigger downs of 2022, while his Chief Market Strategist has been as grizzly as an angry bear since the beginning of the year. Goldman Sachs’s top guns have leaned toward the less-than-optimistic view for most of the year, following the lead of its Chairman David Solomon. Morgan Stanley CEO James Gorman has been been a bull for much of the year, and his Chief Market Strategist, Mike Wilson has been pounding the bear table, as he had been since early 2021.

All of this proves that broken clocks can be right at some point.

So, what is an investor (and or a CNBC ‘short-term trader’) to do, knowing that September-October time sell-offs are the best advertised “upcoming crisis events” since long before Millenials were even born?

MarketsMuse has been following an assortment of stock market pundits, ‘technicians’, and global macro experts for months. The stock market pundits have reliably proven to be wrong, simply because most of them are employed by asset managers and investment banks whose primary purpose of existence is to sell investment products to confused investors. The notion of advising clients to “stay in cash until there is more clarity” is the last thing they would advise, until after the stock market has rebounded 25% from its lowest point. And in bear markets, that is precisely the time to lighten up, not to enter.

The chartists have proven prescient (with bearish medium-to-long term views, and while various global macro gurus have been somewhat blind-sided thanks to “not anticipating extent of Russia-Ukraine fiasco to “discounting what the Fed meant and what they heard the Fed say”. The global macro pundits who take into technical analysis along with the assortment of pillars within the global macro playbook have, for the most part, been telling you to be wary of buying stocks since the Fed went into QT (Quantitative Tightening) mode.

Lesson to be learned: NEVER FIGHT THE FED; regardless of what Jim Cramer spews.

We can tell you that two of the more objective market experts that we’ve followed include Michael Kramer of Mott Capital and Neil Azous of Rareview Capital. Both of these 40-something students of financial markets have proven prescient throughout the year.

Kramer operates a relatively small hedge fund, yet is not beholden to bomb throwing and his humility factor is rare. While his equity-focused fund strategy is benchmarked to the S&P500 and that fund’s performance is still slightly negative on the year to date, his short-term trading calls have proven to be rock solid. Kramer is clearly a fan of all things technical, and his daily tweets and article posts on Seeking Alpha have made for great short and medium-term forecasts. Below are excerpts from charts that he has posted in recent weeks.

Rareview Capital’s Neil Azous layers his fundamental research (which incorporates rates, FX, energy, and geopolitical risk metrics) on top of technical charts. For example, in late April, after the S&P 500 had fallen from 4600 would to 4200, Azous sent a letter to a close-knit group of the world’s most sophisticated investors and warned of a fall down to 3600. Two weeks later, many (but not all) Wall Street analysts pivoted from bullish to bearish and bid on to Azous’s forecast. Azous then re-iterated his less than sanguine view in mid-May, suggesting S&P 500 (would likely go below 3400 before the worst was over).

Throughout the year, Bridgewater Capital’s Ray Dalio, viewed as one of a unique breed of global macro thought-leaders) has been an outspoken bear, even if it took him until recently to ballast his firm’s exposure to Chinese equities. While Wall Street stock market pundits have been pushing the buy the dip strategy, Dalio’s Bridgewater has reported 30% gains on investments. He’s still a bear; Dalio suspects the next 10 years will fall into the category of “another lost decade”.

From a historical perspective (yes, Matilda, history does it repeat itself!), and taking into account 2022 stock investors have suffered their worst start to a year since 1970, consider the following factoids that we sourced from across the ethernet:

  • According to APNews, bear markets since World War II have taken an average of 13 months to go from peak to trough, whereas the average time for the stock market to recover stands at 27 month
  • Forbes 08-24-22*  “In fact, the average length of a bear market for the S&P 500 is just 289 days. That’s not a typo. Just over 9 months and the average bear market is done. Finished. Not only that, but once the market turns around, the average bull market runs for 991 days or 2.7 years. Not a bad deal for investors. The bear market in the S&P 500 was confirmed on June 13th, 2022, but the market began its slide on January 3rd 2022. With this date as the start of the current official bear market, the average bear market of 289 days means that it would finish on the 19th of October 2022.
  • So there you go, the bear market will end, based on the historical average, in the Fall and the good times will be back by Christmas. * https://www.forbes.com/sites/qai/2022/08/24/the-average-bear-market-lasts-289-days-how-long-do-we-have-left/?sh=66f6e5245d5d
  • Raymond James’ historical performance of the S&P 500 Index throughout from `1926 through March 2017. The average Bear Market period lasted 1.4 years with an average cumulative loss of -41%.
  • Felix Richter / Statista.com June 2022  https://www.statista.com/chart/27616/length-and-depth-of-the-latest-s-p-500-bear-markets/bear Bear markets are not an everyday occurrence, thankfully, with the latest one being just the fourth in the 21st century. Looking at past bear markets all the way back to the 1970s indicates that things could very well get worse before they get better. In the previous seven bear markets, the S&P 500 dropped by an average of 38 percent before turning around and it often took years before the index had recovered all of its losses and returned to its previous peak.
  • Across the 10 bear markets since 1950, the longest was 929 days and the shortest was 33 days. Since 2000, there have been only three bear markets not including this one. One of those was history’s shortest; Bear markets, even the long ones, have always given way to bull markets
  • 1973-1974  48% decline, 69 months to break even..
  • 1980- 20 months; then 3 months to break even
  • 2008- 50% decline and two years to break even
  • S&P 500 bear markets since 1946 have taken an average of 389 calendar days to bottom, and then another two years to return to their prior high.
  • We are currently experiencing the 22nd bear market since 1929
  • The average loss of bear markets to reach the bottom before turning back up since 1929;  37%, Median 33.5%
  • The average length of a bear market is 344 days, median of 240 days (best case 2 years, outside 3 years)
  • 1990 bear market lasted 31 months
  • Nine of the 12 bear markets since 1948 have been accompanied by recessions, according to investment research firm CFRA
  • From peak Dec 1972, it took 8 years and 8 months  (to July 1980) for SP500 to achieve break even. Then it rallied 25% over the next 2 years, then fell 30% over the following two years into Aug 1983; not returning to a high point until January 1985
  • 2000-2007 was the lost decade.  Let’s not forget 2008-2013; prices peaked in late 2007, and did not achieve ‘break even’ until April 2013… Slightly higher (before adjusting for inflation) vs SP high of 2000.  So that’s actually a lost decade and ½.
  • According to investment analysis firm Seeking Alpha, the average duration of an S&P 500 bear market since the 1920s has been 289 days or about nine and half months. (The shortest, in March 2020, during the onset of the COVID-19 pandemic in the US, lasted just one month.) On average, the S&P 500 declined about 36% during those bear periods. 
  • But more recently, the 14 bear markets since World War II have averaged 359 days, or close to a year, according to Bespoke Investment Group.
  • Analyzing all the bear markets since World War II, Ben Carlson of Ritholtz Wealth Management found it took 12 months to go from “peak to trough,” or from the end of a period of growth to hitting rock bottom. That means the current bear market would bottom out at the beginning of 2023, a year after January’s peak.
  • Jan 2022, famed chartist Larry Williams predicted a series of declines and rallies, yet argued S&P500 would close the year higher. Yikes.
  • One of the shortest bear markets: Feb 2020 to Aug 2020, it took only 9 months to break even (more precisely, the shortest bear market in recent history Jan 2020 to Oct 2020 (pandemic era, the QE era with near-zero interest rates)
  • 2016 A recent study from Oxford University found that “returns on stocks with the most optimistic analyst long-term earnings growth forecasts are substantially lower than those for stocks with the most pessimistic forecasts.” In other words, your investment portfolio would be better off if you did the exact opposite of what most Wall Street analysts advise.

If you have a comment, a contribution or a tip, please reach out to us

mike novogratz crypto industry

The Tale of Crypto Talking Head Mike Novogratz

mike novogratz galaxy digital

For those not aware, Michael Novogratz, the famed crypto industry ‘pioneer’ and crypto evangelist is a former Goldman Sachs ‘global macro wunderkind’ who then did a stint at asset management firm Fortress Investments, which cratered during his watch, turned into a bitcoin evangelist and became the “bitcoin billionaire” brains behind “crypto investment firm” Galaxy Digital. He has a long history of making big bets with other people’s money. Unfortunately, his gambles have often turned into snake-eyes when the dice stopped rolling.

But that’s OK, his personal investment accounts weren’t exposed to the slaughter that was wreaked on Fortess’s institutional investors when his misguided bets on Brazil currency back in 2014 turned into sour coffee grinds. The losses on bets he made or oversaw devastated Fortess, yet the firm managed to extricate its stakeholders through an IPO, enabling Fortress executives to cash out with tens of millions of dollars each.  

“At Fortress troubles first surfaced in the macro funds run by Novogratz, a man known for his glitzy lifestyle, complete with a Tribeca duplex once owned by Robert De Niro and a flamboyant wardrobe featuring diamond-studded belts and cowboy boots.”

He quit Fortress to start a firm to invest his own wealth. He kept investigating bitcoin and other cryptocurrencies, becoming more serious about the investments.

Over time, Mr. Novogratz came to see them as a “really cool new technology” that was likely better capable of storing value amid rising inflation than alternatives, he said at a recent conference. Soon, he was a true convert, buying $10 million of bitcoin and another cryptocurrency called ether partly because he sensed a lack of trust in global currencies, he said.  See https://www.wsj.com/articles/mike-novogratzs-crypto-comeback-faces-a-trial-by-fire-11654315211

mike novogratz luna

During the past five years, Novogratz has become the poster child for crypto and bitcoin, “talking his book” at every opportunity, and helping to lead thousands of blind mice investors to pump up the price of bitcoin and to plow hundreds of millions of dollars into his firm Galaxy Digital (OTCMKTS: BRPHF) so that he could “invest for them”—while reaping fees that would make most people’s eyes pop out.

Throughout the unprecedented bubble building in crypto “currencies”, Novogratz and many other evangelists/promoters including Jack Dorsey, Elon Musk, Michael Saylor, Disney film star Brock Pierce, the Winklevoss twins, investing genius and former Donald Trump PR trumpeter Anthony Scaramucci, Internet Billionaire and Game Show Host Mark Cuban among so many others, have proclaimed that Bitcoin, Ether, Tether, and many others represent “a store of value”, “a hedge against inflation”, “a safe haven when traditional financial assets (stocks, bonds, sovereign currencies) suffer from global economic and geopolitical turmoil.” All the crypto evangelists, and in particular, famed hedge fund manager Ray Dalio, proclaim that Bitcoin and other so-called currencies represent the “digital version of gold“; which many global investors believe to be a useful hedging tool that should be part of every portfolio.

So let’s take a measure. Since January of 2022, the US equities markets (as measured by S&P 500 index, DJIA, as well as markets in many other advanced countries have suffered generational losses in share prices. The declines of 25% in value in equity prices are thanks to an inflationary spiral caused by supply-chain challenges brought on by Covid 19, monetary policies that created historic government hand-outs in an effort to stem the impact of Covid-19, along with a global geopolitical crisis thanks to Russia invading Ukraine, and a sober reaction to over-inflated enterprise valuations and hysterical stock market speculation. The combination of these events has almost no comparison when looking back five decades.

Yes, stock markets are cyclical and suffer bear markets and crashes; some short-lived, others longer-lasting. The global benchmark S&P 500 is off 24% from its Dec 2021 all-time high; the German Stock Market Index has shaved 20% from its high, and the Shanghai Stock Index is off 10%. Gold, the universal hedge against both geopolitical crisis and inflation, is up a scant 1% YTD. Bitcoin, the proclaimed “hedge against all of the above-noted crisis events” has plunged 69% from its stratospheric all-time high.

As of June 18 2022, Bitcoin has lost more than 60% of its “value” on a YTD basis.

Among other investments, Mike Novogratz, via Galaxy, was a big backer of Terra Luna–a platform based on Tether, the digital asset platform that was co-founded by another crypto genius, former child-actor Brock Pierce. He’s a self-proclaimed billionaire too–and many refer to him as the “Prince of Puerto Rico” in view of the real estate he has acquired and the influence he has over the swarm of crypto ‘entrepreneurs’ who have taken over much of that island.

Like Novogratz, Pierce is an active investor in a broad swath of crypto initiatives and start-ups, one of which is a phony funny, yet apparently, a fraudulent firm calling itself Seaquake.io, for which Pierce is identified as an advisor. It is also a criminal enterprise that MarketsMuse has profiled for the past two years, and its founder Andrew Katz, is now purportedly a fugitive from justice.

SEE THE JUNE 2022 UPDATE https://www.marketsmuse.com/andrew-katz-seaquake-crypto-firm-still-at-it/

brock pierce investments
https://www.marketsmuse.com/founder-ceo-of-crypto-trading-firm-seaquake-io-andrew-katz-convicted-in-new-york-now-a-fugitive/

Let’s not forget that investments made by Galaxy included Novogratz and his partners receiving ‘tokens’ issued by the companies they invested in that were priced at pennies. Those tokens were no different than penny-priced ‘warrants’ given to underwriters of traditional IPO offerings.

After pumping the news of those investments, those tokens turned into ‘real money’ for the promoters—who cashed out into the frenzy and bought mansions and boats; reminiscent of the antics made famous by the infamous  Jordan Belfort’s firm Stratton Oakmont—the underwriter for the 1993 IPO of shoe company started by Steve Madden.

[Belfort and Madden were then convicted of securities fraud and both went to jail. Flash forward to 2021, Jordan Belfort repurposed himself into a crypto evangelist and is minting millions by ‘advising’ people on how and what crypto deals to invest in.]

February 2021– Novogratz Sees Bitcoin at $100k 

Bloomberg Technology- Michael Novogratz, a long time proponent of cryptocurrencies through his firm Galaxy Digital Holdings Ltd., said Bitcoin and other digital coins have become “an institutional asset class” and banks are “frantically” trying to get in on the action.

https://www.bloomberg.com/news/videos/2021-03-04/mike-novogratz-says-bitcoin-will-hit-100k-by-end-of-year-video

https://coinfomania.com/novogratz-says-crypto-is-closer-to-bottom/

Mar 31 2022 In Midst of Crypto Sell-Off, Novogratz Says “I’m More Constructive about the market than I was previously..” Michael Novogratz, the billionaire cryptocurrency investor who leads Galaxy Digital Holdings Ltd., said that while he still expects a volatile year, he has become more “constructive” about digital-asset markets than he was earlier. 

“It wouldn’t surprise me to see crypto significantly higher by the end of the year,” Novogratz said during Galaxy’s earnings conference call on Thursday. “Given the adoption cycle I’m seeing, given the way markets trade, and how I see new people wanting to get in, the innovation we’re seeing in web3 and the metaverse space, I’ve gotten more constructive than I was at the beginning of the year.” 

No surprise then that soon thereafter, while talking up bitcoin investing and predicting meteoric price rises, he was selling stakes that his firm Galaxy Digital held in various “cryptocurrencies”.  Nice.  

May 9 2022 CEO Michael Novogratz highlighted weakness across crypto and equity markets during Galaxy’s earnings call Monday, though said he isn’t “panicked by any stretch.” He added that his recent investor meetings point to growing adoption, and noted that “crypto as a tech play” is gaining momentum.

“Volatility will continue,” according to Mike Novogratz, although he said he expects bitcoin to hold around the $30,000 level and ether to stick around the $2,000 level.

Source: https://www.coindesk.com/business/2022/05/09/galaxy-digital-records-q1-loss-of-1117m-amid-crypto-losses/

June 5 2022 Novogratz Says “Bitcoin Won’t Break $20k” speaking at the Morgan Stanley Financials Conference, the billionaire investor, known for always sharing his opinions on events surrounding the asset class, showcased his bullish stance on cryptocurrencies. 

Novogratz said he is confident that bitcoin (BTC) and Ether (ETH) would not crash below $20,000 and $1,000, respectively.

The crypto proponent stated that the two leading cryptocurrencies would hold strongly at those levels while noting that the benchmark of S&P 500 (.SPX) has dropped more than 20% from its record high earlier in January, and the stock market might plummet further to 15% to 20%.

June 15 2022 “Crypto Crisis Evokes 1998 Hedge Fund Crash that Crippled Market”

That’s what Mike Novogratz, CEO of top crypto investment firm Galaxy Digital, told CNBC Wednesday (June 15), referring to the 1998 collapse of a large and highly leveraged hedge fund that sent shockwaves so large through the economy that the U.S. government was forced to intervene and broker a $3.6 billion bailout.

June 18 2022  BTC sold down to $18,500.00

Our Editorial Team begs to ask the question, “Aside from making mediocre investment managers become multi-millionaires and billionaires, along with similar exponential gains in net worth for tens of hundreds (and upwards of many thousands of “innovators” and “disruptors”), what product or service, or what actual efficiency has been created for any industry that would justify the outsized gains in net worth afforded to a relatively few?” Contact Us to provide a rebuttal.

andrew katz seaquake

Andrew Katz Seaquake Crypto Firm CEO Still Scamming

Andrew Ross Katz (aka Ross Katz), founder and CEO of Seaquake.io, a self-labeled “crypto trading firm” and “B2B service for cryptocurrency exchanges”, along with his partner, the firm’s Chief Financial Officer, Matthew Krueger of San Francisco, were first profiled by this outlet in September 2019 for their roles in defrauding a Family Office out of several hundred thousand dollars.  And, while Katz remains at large–he continues to target a growing list of other unsuspecting victims.

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Seaquake.io CEO Andrew Katz, A “Self-styled-Entrepreneur”
Photo from “Pay-to-Promote-Yourself” Blog Techbullion
andrew-ross-katz-arrested-apr 1 2021 miami florida
Andrew Ross Katz-“Crypto Entrepreneur” Mug Shot Photo April 2021 Arrest Florida
Case # 13-2021-CF-005707-0001-XX

The gory details of that incident and the series of blatant misrepresentations made by those individuals became a matter of federal court record when a federal lawsuit was filed in Florida’s Middle District Court, merely several weeks after the ink was dry on the investment agreement with Katz, Krueger and the assortment of Seaquake connected shell companies under their control. 

The supporting evidence to allegations of investor fraud made by the plaintiffs included investor documents executed by Andrew Katz, a smorgasbord of other evidence underscoring blatant misrepresentations and phony assertions made by Katz and Krueger as to their personal and professional backgrounds, the investment itself, along with an extensive file of email and other digital communications sent by Andrew Katz, and with copy to Krueger.

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), “CFO” Matthew Krueger (c), and CIO Dylan Knight

According to the court documents, within days after the investors wired funds to a Seaquake entity, they learned of a series of misrepresentations made by Katz and Krueger, and demanded the return of their funds. In response, Katz and Krueger stated “they had no obligation to provide any information to the investors or the attorney for the investors, and would not respond further.” Days later, Katz and Krueger transferred the investor funds to other Seaquake bank accounts and to personal accounts in their names, and to a corporate account in which Katz’s father, Ken Katz of Arvada, Colorado is the registered agent. After transferring the funds, Katz and Krueger proceeded to dissolve the corporate registration of the entity to which the investors had sent their funds.

The preponderance of the incriminating evidence led the federal court judge to conclude the defendants had ‘touched the third rail’ of federal civil statutes pertaining to investor fraud and securities fraud. To mitigate further harm to investors, the judge issued an emergency temporary restraining order (TRO) that put a freeze on the variety of corporate bank accounts held by the web of Seaquake corporate entities controlled by Andrew Katz and Matthew Krueger, as well as the known personal bank and brokerage accounts held by Andrew Katz and Matthew Krueger. Days later, Katz and Krueger moved the funds again, first to cryptocurrency platform Coinbase, and then to cryptocurrency custody and trading platform, Binance.*

In view of the brazen nature of the fraud perpetrated by Mssrs. Katz and Krueger, this financial industry- published a series of follow-on articles profiling the activities of this ‘enterprise’, as well as Katz’s sordid prior criminal history, including recent Orders of Protection issued against Katz, a litany of criminal arrests across four different states over multiple years on charges of harassment, aggravated assault, weapons charges, breaking and entering, and stalking. The most recent known arrest occurred in April 2021 and took place in Miami, Florida, when Katz was charged with 11 Counts:

Andrew Katz Arrested Again-In Florida 04-01-2022
Arrested 4-01-22
Case 13-2021-CF-005707-0001-XX
  • FALSE IMPRISONMENT ( Bond: 5000 )
  • TAMPER/ WIT/ VIC/ 3D DEGREE FELONY ( Bond: 7500 )
  • RESISTING OFFICER WITHOUT VIOLENCE TO HIS PERSON ( Bond: 1000 )
  • RESISTING OFFICER W/ VIOLENCE TO HIS PERSON/ FIREA 3 CNTS ( Bond: 7500 )
  • ASSAULT/ AGGRAVATED/ POL OFFICER/ FIREFIGHTER/ INT 3 CNTS ( Bond: 7500 )
  • DEPRIVE OFFICER OF MEANS OF PROTECTION/ COMMUNICTN 2 CNTS ( Bond: 5000 )

The Florida court records are available at https://www2.miami-dadeclerk.com/cjis/casesearch.aspx Case Number: F-21-005706, F-21-005706 and Case Number 13-2021-CF-005707-0001-XX

A February 2022 conviction for assault charges in New York stemmed from his March 2020 arrest in which Katz assaulted his now estranged wife. Law enforcement sources have indicated there is now a subsequent warrant for violating the second Order of Protection, and a fugitive warrant issued in New York for his arrest. Katz failed to appear for sentencing on the assault conviction, then fled the jurisdiction, and supposedly abandoned a $100,000 cash bond. The Manhattan District Attorney’s Office would not comment or explain why those criminal records are sealed.  The New York Criminal Court records are also sealed.

andrew-katz-seaquake-crypto-felony-charge-ny mar 2020
Great Track Record-For Arrests-Andrew Katz, Seaquake.io CEO

This platform also pointed to a conclusion by another expert that Seaquake principals committed SBA Loan Fraud relating to a forgivable PPP loan granted to the company in the midst of the pandemic crisis. Public records show that an application was processed and a loan received by Wyoming-registered Seaquake entity “Seaquake OPS LLC” that listed employees of the company which included Katz’s then-estranged wife, who was listed as “Creative Director”. According to informed sources, “she was never an employee, and never performed any work for the company”. When asked why that individual’s profile appeared on LinkedIn as “Creative Director” for Seaquake shortly before the loan application was submitted, the source stated “She had never created a LinkedIn profile for herself, any less one that would include a fictitious employment history.”  The corporate registration for the Wyoming-domiciled Seaquake entity that received the SBA PPP loan was dissolved four months after Katz and Krueger received the funds from the SBA. 

Cryptocurrency Meltdown Calls for a Re-Visit

As fortunes implode and the crypto industry becomes un-hinged, the cause and effect of scammers, charlatans, and Ponzi-style schemes

The intent of our editorial team has been to protect other investors from being duped by Katz and Krueger, and from any others advancing similar frauds against unsuspecting investors. In our expose, we also spotlighted several “legitimate” crypto and digital asset investment firms that, according to the Seaquake.io corporate website, have purportedly invested in the Seaquake enterprise without bothering to perform basic due diligence that would typically include interrogation of court databases and criminal background searches. 

andrew-katz-seaquake-investors-fraud

The crypto “investment firms” displayed on the Seaquake website include Percival Capital, operated by former Disney “Mighty Ducks” star turned world-famous crypto enthusiast and investor and aspiring political candidate Brock Pierce, along with industry investment firm Blockchain Founders Fund (“BFF”). 

The Seaquake website had (until recently) displayed Pierce and BFF Managing Partner Aly Madhavji as Advisors to the firm.  Other investors displayed include “SOSV ChinaAccelerator”, a China-based VC and PE firm, Sydney; Australia-based alternative asset investment firm “Artesian Ventures”, a firm called “ScaleX”, and a little-known investment firm “Red Spark”.  The latter is operated by a Stephen Gill, who resides in New York and Puerto Rico. Gill is also displayed as an Advisor to Seaquake. These actors either purposefully chose not to perform a scintalla of due diligence for their own reasons, or simply overlook the red flags before they deployed their respective investors’ capital to the Seaquake enterprise.  

Since April of this year, four different “pay-to-promote yourself” blogs have published “interviews” of Katz, each of which profiled him as a “crypto entrepreneur”. Each of those obscure blog platforms  (“TechBullion.com”, “Laptopsforless.com”, “ScoopIt.com”, and “VentsMagazine.com”) display purported interviews by “journalists” (who each use pseudonyms,) and showcase background information for Andrew Katz that among other “virtues”, includes him (i) “having worked as a securities industry trader and traded “billions of dollars”; (ii) that he “earned a Masters in Finance from Harvard University”, and (iii) that “Seaquake has been generating profits within fifteen months of being created in 2018.” 

andrew-katz-seaquake.io fraud
“Interview with Andrew Katz” in “pay-to-promote your image” blog
Bottom right image: New York Criminal Court Arrest Record Nov 2020

All very entertaining claims; yet all are false.

  1. Financial Industry Background. Securities Industry regulator FINRA has NO record of Katz ever being employed in the industry. He claims to have worked for EFG Bank as a trader, yet a senior HR executive for EFG Bank stated “we have no record of his employment.”

UBS, the other financial industry firm that Katz claims to have worked for stated “we cannot confirm (or deny) having employed him.

2. “Academic Pedigree” “Harvard Masters in Finance”. Harvard University records indicate Katz did attend an online course for 1 year and earned a Master of Arts, (not Finance); comparable to degrees offered by the online University of Phoenix. As to other academic credentials, during his youth, Katz did briefly attend “World Wide Association of Specialty Programs”. This ‘school’ is “in the business of serving desperate parents of troubled youths and specializes in improving the students’ aberrant social behavior..”

3. “Business Success“. The business he claims to be “generating profits since shortly after we were formed..”?  

Katz disputes this himself in documents obtained from the civil lawsuit in Florida. Katz submitted an affidavit stating “investors were told the business is a start-up, does not generate revenue [no fewer profits] and is not expected to until first raising several million dollars in development capital.”

4. “Industry Entrepreneur.” Katz and Co also maintain personal and company Twitter accounts; each of which falls into the realm that Elon Musk has used to walk back his bid to acquire Twitter; the percentage of phony Twitter accounts is exponentially greater than what Twitter has stated in corporate filings.  In this case, Katz’s personal Twitter account, @AndrewKCrypto (https://twitter.com/AndrewKCrypto) indicates his having 5346 followers. A simple interrogation discovered that all but ten of those followers are legitimate Twitter accounts. The rest are “bots” and all of those accounts are less than several months old, none have more than 5-10 followers; a classic ‘tell’ for those familiar with Twitter Inc.s failure to remove phony accounts.  The same seems to be true for the Seaquake company Twitter account (@_Seaquake_); the account boasts nearly 5000 “followers”, yet 98% of which Elon Musk would say are “Phony Followers! All Bots!”

MarketsMuse has made repeated attempts to contact each of the investors displayed on the Seaquake website. Earlier this year, Ali Madhavji of Blockchain Founders Fund indicated that “BFF has no involvement with Seaquake”, yet his firm’s name remains prominent on the front page of the Seaquake.io website. 

A representative of Percival Capital replied to us with a statement that “They [Seaquake] were not authorized to display Mr. Pierce on their website, and we requested them to remove that reference.” The Percival Capital representative did not dispute that Pierce and his firm are in fact investors. “SOSV” Managing Partner William Bao Bean stated that his firm is in fact an investor, but would provide no other information. Stephen Gill, nor any other individuals who seem to be affiliated with Red Spark or individuals associated with “Scalex” replied to a request for comment. 

Law enforcement officials from Arvada, Colorado, New York, Los Angeles, and Miami are all familiar with Katz. They are aware that he uses aliases “Ross Katz” and “Stark Katz”, and of the assortment of harassment charges stemming from abusive messages and death threats delivered via email and burner phone [“purportedly’’] sent by Katz, each in retaliation against a variety of individuals, including those who have filed charges against him. Knowledgeable officials have suggested that ‘the tone and tenor of the messages, the history of arrest charges, the serial nature of his actions, and other corroborating records makes it clear that he [Katz] is a dangerous individual who continues to commit brazen acts.’  Added one expert, “It doesn’t take a trained criminal profiler to conclude that this individual will continue to pose a threat to others until such time as someone from the law enforcement community or a regulatory agency takes proactive measures.”

Begging the question as to how it is possible that Katz and his accomplice Matthew Krueger remain at large.  Three former government prosecutors who are familiar with the matter expressed being “baffled” by the fact that Katz has been repeatedly arrested, but not successfully prosecuted and jailed. As to Katz’s current whereabouts, he was last sighted in April of this year, while mingling with Seaquake “co-founder” Dylan Knight at a Miami crypto industry conference. One individual who is known to be an acquaintance of Katz, and who requested anonymity, suggested that “he might be in a medical clinic and being treated Monkeypox.”  

*The above-referenced Federal Civil Litigation was “dismissed without prejudice” on a technicality after the presiding judge ruled that the Florida Middle District Court had “no personal jurisdiction” over the defendants. Despite plaintiffs submitting evidence that Katz maintained a voter registration in Florida and that one of the Seaquake entities was incorporated in Florida, the judge recommended to plaintiffs that they re-file their action in a different court. One attorney who is only tangentially familiar with the case stated “The statute of limitations is still open for such an action to be advanced in the State of Colorado or the State of California.

andrew-katz-crypto-firm-seaquake-

Founder / CEO of “Crypto Trading Firm Seaquake.io” Andrew Katz Convicted in New York; Now a Fugitive

FEBRUARY 15 2022: ANDREW ROSS KATZ AKA ROSS KATZ WAS CONVICTED OF ASSAULT CHARGE IN NYC on Feb 7; FLEES AND FOREGOES $200K BAIL BOND; FUGITIVE WARRANT FOR ARREST ISSUED IN NEW YORK; KATZ NOW BELIEVED TO BE SENDING DEATH THREATS TO WITNESSES; CONSIDERED TO BE ARMED AND DANGEROUS

In a continuation of a bizarre story that MarketsMuse has been monitoring for more than two years, Andrew Ross Katz, the founder, and CEO of so-called digital asset/crypto trading firm Seaquake.io is now a fugitive after failing to appear for a series of court dates in New York Criminal Court and since being convicted on Feb 7 2020 of assault charges that were first brought in November 2020.

Court: New York Criminal Court
Case # CR-020482-20NY
(PUBLIC RECORDS EXPUNGED)

Arrest Date & Time: November 5 2020 09:30 Arrest #:M20629660 
andrew-katz-seaquake-felony-assault-charge-new-yhork
New York Criminal Court File CR-020482-20NY

According to confidential sources, the ADA prosecuting the case had been warned at the early stages of the criminal proceedings of Katz’s extensive criminal background in multiple states, and that the ADA had been lobbied to request the court to deny bail, as the defendant should have been considered a flight risk. Katz’s criminal arrest record extends over many years in cities that include his hometown of Arvada, CO, Los Angeles, New York, and Miami. Katz’s most recent arrest apparently took place in late 2021 in Miami, during the same time a cryptocurrency convention was being held in that town.

SEE THE JUNE 2022 UPDATE-

As to the charge of Aggravated Harassment, according to multiple sources, this particular charge is consistent with a behavior pattern that Katz has perpetrated repeatedly over the past years against various people (unrelated to the current charges). No less than four individuals who have had ‘run-ins’ with Katz, including former landlords, relatives, and aggrieved investors have each independently contacted MarketMuse to share respective incidences in which Katz has tormented them with physical threats via voice message and text messages sent by ‘burner phones’, as well as defamatory messages that Katz has posted on social media platforms, all in effort to intimidate these individuals in retribution for legitimate complaints they had made against him in various jurisdictions.

Editors note: Fugitive Katz’s ‘aberrant behavior’ seems to extend back to his adolescence, according to public court filings. While in his teens, he was dispatched by his parents to a Utah-based ‘educational facility operated by “World Wide Association of Specialty Programs” that, according to public records, “is in the business of serving desperate parents of troubled youths and specializes in improving the students’ aberrant social behavior..” Per link above, fugitive Katz and Alyson Katz (Andrew Katz’s mother) were members of a class-action lawsuit brought against “WWSPS”. (That suit was dismissed in 2011).

andrew-katz-seaquake-felony
Crypo Firm Co-Founder Andrew Ross Katz aka Ross Katz aka Stark Katz

According to informed sources, soon after his disappearance last week, Katz has purportedly commenced a series of death threats against a separate individual (and immediate family members), who is a victim of financial fraud that Katz and partner, Matthew J. Krueger of San Francisco are alleged to have committed back in 2019. It is believed the [purported] death threats that came from Katz (“purportedly, yet with high probability”, according to law enforcement officers familiar with the matter), are part and parcel to a lengthy history of intimidation tactics that Katz has exacted in retribution on those have filed charges against him.

andrew-katz-matthew-krueger-seaquake-investor-fraud
Seaquake’s Matthew Krueger (l), Fugitive Andrew R. Katz (r)

To the amazement of those interviewed and familiar with the apparent criminal activities of Katz, Krueger, and associated entities, the individuals’ profiles, and respective current Seaquake.io executive roles remain displayed and promoted on LinkedIn (e.g. Andrew Katz, Founder & CEOMatthew Krueger, “Partner & CFO” and the company’s website, which continues to publish “updates” that suggest the firm offers a range of “crypto trading and fintech applications and services to the cryptocurrency industry”. That website also displays a number of crypto industry investment firms that have purportedly made investments in Seaquake.

Most recent updates to that website suggest that funds managed by Crypto Industry Pioneer Brock Pierce‘s Percival Ventures, along with those from Blockchain Founders Fund, whose senior principal is Aly Madhavji, are investors in Seaquake. Both Pierce (a 2020 presidential candidate) and Madhavji are displayed as Advisors to the company on the Seaquake website. Sources have told MarketsMuse that Madhavji has denied having any connections to Seaquake, yet neither of these individuals or members of their firms has responded to outreaches by MarketsMuse for them to confirm or deny the information displayed on the Seaquake.io website.

$DWAC-SPAC-Trump

$DWAC, The SPAC on Crack

Digital World Acquisition Corp (NASDAQ:DWAC) Blank Check Company aka SPAC Proposes to Merge With Trump Blank-Deck Company. Will SEC Investigate?

When “E.F. Hutton Talks”, Will SEC Chairman Gensler Read the SEC and FINRA Rules Prohibiting SPAC Sponsors from engaging with acquisition targets prior to listing??

Just when we thought that MarketsMuse coverage of Donald Trump’s financial shenanigans had taken a breather, this past week’s announcement by SPAC sponsor Digital World Acquisition Corp (NASDAQ:DWAC) rocked the stock market and created a rocket-fueled run-up in its share price after the ‘blank check’ company created in December 2020 by Florida-based Patrick Orlando, a former Deutsche Bank derivatives trader turned SPAC promoter would be merging with Florida-based Trump Media & Technology Group (aka TMTG), a blank slate “social media enterprise” with no operating history and established by the former President two months after the formation of “DWAC” (in February 2021).

The Meme of the Week. When the announcement made by the DWAC sponsors and the Trump entity TMTG hit the tapes after the close of trading Wednesday, Oct 20, the following morning, the share price of the Digital World Acquisition Corp, which became publicly listed on NASDAQ six weeks prior, soared from $10 to $75 within a matter of a few hours, and was the second most actively traded stock in America. On Friday, the shares, which cannot be borrowed for shorting other than by broker-dealers, traded as high as $175 before closing at $90 (with the last sale of $80 in Friday’s after-hour trading session).

scaramucci-dwac-spac-trump

If the DWAC SPAC shareholders approve of the merger, and if the SEC does not raise a red flag, Trump Media & Technology Group will receive $293 million in cash that Digital World Acquisition Corp has in trust. 

So, we now have the next classic example of a “meme stock” (aka “Me-Me”) driven by so-called Reddit Bandits and tens of thousands of retail traders entering buy orders to drive up the price, believing they would force ‘hedge funds’ who might have been shorting the stock to pay even higher prices to cover their positions.  It’s a new take on the old-style “short-squeeze pump and dump.” 

Read about our coverage of Crypto-Kid Con Artists Andrew Katz and Matthew Krueger. The Saga continues. After being charged with felony assault in New York last year, Seaquake CEO Katz is said to be a “no-show” after failing to appear for Jan 20 2022 sentencing hearing at Manhattan Criminal Court. NOW A Fugitive/CLICK HERE/ for the story.

OK, a slug of buyers who swamped Fidelity, Robinhood, TD Ameritrade, and other brokers are also MAGA cap wearers and anti-vaxxers who will give Trump every last penny of their unemployment checks or social security checks to keep Trump’s hate-filled and anarchy-riddled beliefs front of stage, and to the point of breaking down the doors of the nation’s capitol building.

Here’s the joke: 8 out of 9 of the largest holders of DWAC include the industry’s biggest hedge funds, whose plain-vanilla strategy is to buy SPACs at the initial offering as a means to deploy cash that is not being used by the fund, and with the upside chance the investment will make a profit. Alternatively, stakeholders can redeem or ‘put back’ their holdings to the company at their original cost and get their full investment back after a merger announcement is made. Think of it is as a money market fund that has a “knock-in provision”.

The other largest holder is Arc Global Investments and owns the right to acquire approximately 20% of the authorized shares, which is controlled by none other than Patrick Orlando. Albeit, unlike the nearly 80% of shares acquired by the hedge funds, Arc’s shares have a restriction that prohibits selling those shares for an extended period of time. At least 2 of the 8 hedge funds (SABA Capital and Lighthouse Investors) were owners of several million shares each, and they made tens of millions of dollars inside of two days by unloading their shares to the retail investors, many of whom paid between 500%-1700% more for the shares from the prior day’s price. 

The punchline to the joke: The two funds that acknowledged selling to witless retail investors as the stock was skyrocketing did so because they wanted nothing to do owning a company that might eventually enable a Trump-fueled media enterprise initiative.

Fool Me Once, Shame on You. Fool Me Twice Shame on Me. In addition to the Reddit bandits and followers of Wall Street Bets who bought into the shares of the black-check company that proposes to merge with a still non-existent operating business (other than in name only), hordes of die-hard Donald Trump fans and followers with accounts at Fidelity, Robinhood and TD Ameritrade were believed to have purchased “millions of shares” in the past two days and, according to nearly every professional trader and investment manager in the world, “they paid prices that defied any scintilla of logic; proving that the extent of their education must have been a diploma they received from Trump University.”

Click Here for another MarketsMuse most-read feature stories

EF Hutton is the underwriter for Digital World Acquisition Corp? Adding yet another comedic twist to the story, aside from rumors that Hollywood producer and former Treasury Secretary Steven Mnuchin has purportedly secured the film rights to, so that he can do a remake of the 1949 film classic and Academy Award-winning “All the Kings Men” (which ended with the assassination of corrupt politician Willy Stark by one of his cronies (to put the feature photo of this post into context), the underwriter for Digital World Acquisition Corp, was formerly known as Kingsmark Capital*, and is now going by the name EF Hutton, the once legendary stock brokerage that was best known for its tag line, “When EF Hutton talks, people listen!”

$DWAC-SPAC-Trump

*Kingsmark’s brief history includes underwriting “micro-cap” stocks and SPACs, and acquired the EF Hutton name from the estate of the heirs to the original EF Hutton.

A PIPE Offering is Next? Because Trump spokesperson Liz Harrington stated that “TMGT is worth $1.8 billion” (@realLizUSA­), this would infer that Digital Media Acquisition Corp would need to do a follow-on sale of shares, presumably via a PIPE offering, to raise an additional $1.5 billion in cash that would meet the valuation that Trump believes his non-operating company is worth. Per link above, a PIPE is a private investment in a public equity.

Based on Friday’s closing price, the SPAC company would need, at very least, to nearly double the amount of shares outstanding from 28 million shares to 40 million shares, and to sell those newly-created shares during the “de-SPACing process (which is unlikely to occur for at least another 2-3 months) at Friday’s closing price of $90 via the PIPE offering.

Yes, the total volume on Friday exceeded 130 million shares, and Wall Street syndicate desks managers suggested any secondary sale (2-3 months from now) could be done with no market impact if trade volumes remain the same and the price remains elevated, yet it would also dilute the existing shareholders by nearly 50%.

To the above, one trader suggested “the odds of the DWAC share price remaining at the current exorbitant price level are about equal to the chances the SPAC will be de-listed after an SEC investigation is started; a50-50 probability for either outcome.”

Why should the SEC Investigate? Will Coincidence Kill the Golden Goose and Lead to a De-listing of DWAC?

Some things for Gary Gensler to Consider Before More Retail Investors Get Completely Burned Buying this “SPAC”.

SPACs cannot identify acquisition targets prior to the closing of the IPO. If the SPAC had a specific target under consideration at the time of the IPO, detailed information regarding the target IPO registration statement, potentially including the target’s, would be required to be included in the financial statements

Under the SEC’s rules, a SPAC may not identify a specific target company prior to the closing of its IPO, and the SEC requires the SPAC to disclose in its prospectus that the SPAC does not have any specific target company under consideration, and that neither the SPAC, nor anyone acting on behalf of the SPAC, has engaged in any substantive discussions with a potential target company. In fact, if a non-binding LOI is entered into before the SPAC’s IPO, the SEC may even suggest that it is the target company that should conduct an IPO, not the SPAC, which would defeat the entire purpose of using a SPAC as an investment vehicle and an alternative to a traditional IPO for the target company.

DWAC’s Prospectus states:  “We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.”

Suspicious Behavior? DWAC listed on NASDAQ on September 3; the merger announcement came less than six weeks later. Typically, it takes many months for a SPAC sponsor to research and perform due diligence on many companies before they bring a proposal to SPAC holders.

SPAC Sponsor and CEO of DWAC Patrick Orlando is a “good friend of Donald Trump”.  Orlando resides within a stone’s throw of Trump’s Mar-a-Lago country club and has since acknowledged to the New York Times that he is a “long-time friend of Donald Trump and speaks with him often.”

Collusion or Coincidence? So, is it just a coincidence that Orlando started and completed his due diligence inside of five weeks after the SPAC listed? Or, has there been a major violation of securities regulations, and is the offering prospectus nothing more than toilet paper?

Rule #1: Deny. Deny. Deny. To the above, a Trump spokesperson, speaking off the record (of course!) has since told at least two sources that “Mr. Trump never heard of Patrick Orlando and never communicated with him until weeks after the Digital Acquisition was listed on NASDAQ.”

Really?! At very least, Orlando has already publicly stated that he has been friends with Trump for a number of years and communicates with him ‘frequently’.?

Roma Daravi, a former Trump administration communications executive and the ‘media relations’ representative for TMTG was not available for comment, even if Liz Harrington did comment via Twitter.

Let’s play this back again; DWAC listed on NASDAQ on September 3. Five weeks later they announced proposed merger with Trump’s shell company, TMGT. In the history of SPAC offerings, DWAC has broken the land speed record for listing and then announcing a merger. Their ability to canvass opportunities, perform due diligence on various merger candidates, reach a conclusion, and then execute a merger agreement, all within 5 weeks from the date of listing the SPAC would seem implausible at best, and statistically impossible at worst when considering the average time for this process is 4-6 months.

Let’s try a different angle: The CFO for DWAC is 83 year old Brazilian national Luis Orleans-Braganza. Mr. Orleans-Braganza is a businessman and currently a self-acclaimed “right wing” member of Brazil’s National Congress. Sources say that he has been “a guest at Mar-a-Lago on several occasions” during the past two years.

How About this part of the DWAC Offering Prospectus?

Patrick Orlando’s DWAC Prospectus States “We will identify and complete business combinations with “market-leading companies”. This is identical to the boilerplate verbiage in every SPAC offering document, yet counter-intuitive to the merger announcement if Digital World’s strategy is to identify and complete business combinations with technology-focused, market-leading companies.  For more information, please visit www.dwacspac.com

BUT, TMTG has NO operating business, which would be a cause of concern for the institutional and individual investors who put money into this SPAC based on Patrick Orlando’s representations. TMTG has NO employees of record (other than Trump) and their pitch deck, which appeared on the entity’s website at the same time as the merger news hit the tape, reads as if it was written on a blank whiteboard:

Among other things, the Trump pitch deck, which, unlike any other startup pitch deck, fails to identify any management or key employees that will be executing the business strategy, yet it states: “The group plans to offer alternative media to challenge the traditional social networks like FacebookYouTube and Twitter via a social network called “Truth Social.” One of the slides states “…..envisions to eventually compete against Amazon.com’s AWS cloud service and Google Cloud.”

Other slides suggest “a social network (“Truth Social”) is set for a beta launch next month, and full rollout in the first quarter of 2022, is the first of three stages in the company’s plans, followed by a subscription video-on-demand service called TMTG+ that will feature entertainment, news and podcasts.”

So, we have a blank check company merging with a blank-deck company that is parsing jargon from an array of presentation decks that anyone can download on the internet.  

CAVEAT (EMPTOR): Mr. Orlando’s FINRA record is clean (so far) of any misdeeds. The fact that he worked at Deutsche Bank, the only bank that would extend credit to Trump, is likely a mere coincidence.

As of press time, MarketsMuse has not determined whether any DWAC officers, including CEO Patrick Orlando, spoke with or visited with Mr. Trump at Mar-a-Lago or any place else during the two months in which both Trump Media and DWAC were incorporated. We have yet to obtain evidence as to whether members of Orlando’s team communicated with Trump prior to the SPAC listing.

To the above, given Trump’s penchant for “hiding the potato” and withholding evidence, unless the SEC engages the FBI to trace any and all phone, email and/or burner phone txt communications between the interested parties, Gensler’s enforcement agents who are already overwhelmed with tens of dozens of cases, could face a challenge in their attempt to prove that Orlando and Trump discussed and negotiated a business transaction with DWAC prior to the SPAC listing.

Rudy Guiliani to Defend Trump in any securities litigation? Maybe. Then again, if Trump enlists his favorite lawyer to defend him, despite the fact the former prosecutor and former New York mayor was disbarred from practicing law in in New York (and the District of Columbia), he can still appear in a federal court, which is where any SEC prosecution, as well as any securities class action lawsuits brought by investors, would likely be filed. Sounds like a scene from HBO’s “Succession”.

Boondoggle for Class Action Securities Lawyers: This will create a boondoggle for plaintiff lawyers who specialize in class action litigation on behalf of investors that have lost money buying (and or selling) securities of companies that have blatantly run afoul of securities regulations, including disclosure requirements. Investors residing in New York, Florida, California, Colorado, Massachusetts, and other states should click here for a listing of class action securities attorneys in your state.

securities litigation attorneys DWAC SPAC

Lighthouse Investment Partners shed its holdings in Digital World Acquisition after learning of the deal with Trump’s venture, the fund told CNBC. Lighthouse had owned 3.2 million shares, or 11.2% of the special purpose acquisition company, which trades on NASDAQ, according to a Sept. 30 regulatory filing. 

Saba had owned a 9.3% stake in the SPAC, or 2.4 million shares, according to a Sept. 3 filing.

Other institutional owners that represent the remaining 80% of shares owned in DWAC include Highbridge Capital Management (2 million shares); D.E. Shaw & Co (2,425,000 shares); K2 Principal Fund (1,175,000 shares); ATW SPAC Management LLC (2,425,000 shares); Boothbay Fund Management (2,425,000 shares); Radcliffe Capital Management LP (2,425,000 shares). As of press time, these funds have not yet published updates as to whether they continue to maintain or have liquidated holdings in Digital World Acquisitions Corp.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com

andrew-katz-seaquake-ny-criminal-court-felony-assault

Founder of Crypto Trading Firm “Seaquake” Andrew Katz Returns to NY Criminal Court to face Felony Assault Charge; UPDATE: CONVICTED AND FLEES: NOW WANTED BY NYPD

andrew-katz-seaquake-felony
Crypto Firm Co-Founder Andrew Ross Katz aka Ross Katz aka Stark Katz

Andrew Katz aka Ross Katz aka Stark Katz, the co-founder of so-called digital asset infrastructure and crypto-currency trading firm Seaquake.io, who along with his partner Matthew J. Krueger of San Francisco are facing investor fraud charges, is now slated to return to New York Criminal Court July 14 to answer to one count of felony assault, one count of grand larceny and one count of aggravated harassment.

Court: New York Criminal Court
Case # CR-020482-20NY (PUBLIC RECORDS REMOVED UPON CONVICTION)

Arrest Date & Time: November 5 2020 09:30 Arrest #:M20629660 

Officer Agency:NYPD 

Defendant Katz, Andrew R Katz, whose bail was set at $200,000 had him posting $100,000 in cash, which sources believe to have emanated from funds that Katz and his partner Matthew J. Krueger of San Francisco hoodwinked from a Florida-based family office 18 months ago.

Defendant Katz, who continues to promote himself on LinkedIn and on the firm’s website as co-founder of the so-called digital asset infrastructure company “Seaquake.io” was arrested this past November in New York and has been granted numerous delays to answer to the latest charges. If Katz is found guilty, or if he decides to plead guilty and save the court system the aggravation of having to deal with him, he could be sentenced to a minimum of 2 years in prison.

NEWS ALERT: FEBRUARY 15 2022: ANDREW ROSS KATZ AKA ROSS KATZ CONVICTED OF ASSAULT CHARGE IN NYC; FLEES AND FOREGOES $200K BAIL BOND; FUGITIVE WARRANT FOR ARREST ISSUED IN NEW YORK; KATZ NOW BELIEVED TO BE SENDING DEATH THREATS TO WITNESSES; CONSIDERED TO BE ARMED AND DANGEROUS.

REWARD OFFERED BY NYPD

In a continuation of a bizarre story that MarketsMuse has been monitoring for more than two years, Andrew Ross Katz, the founder, and CEO of so-called digital asset/crypto trading firm Seaquake.io is now a fugitive after failing to appear for a series of court dates in New York Criminal Court and since being convicted of assault charges brought in November 2020. For reasons that would not be explained by the Manhattan District Attorney’s Office, the New York Criminal Court case record was expunged from the public database at the time of the February 7 conviction.

READ THE JUNE 2022 UPDATE

The Manhattan DA would also not comment on allegations the ADA prosecuting the case had been warned at the early stages of the criminal proceedings of Katz’s extensive criminal background in multiple states, and that the ADA had been lobbied to request the court to deny bail, as the defendant should have been considered a flight risk. Katz’s criminal arrest record extends over many years, with arrests on an assortment of charges in cities that include his hometown of Arvada, CO, Los Angeles, New York, and Miami. Katz’s most recent arrest apparently took place in late 2021 in Miami, during the same time a cryptocurrency convention was being held in that town.

Editors note: Fugitive Katz’s ‘aberrant behavior’ seems to extend back to his adolescence, according to public court filings. While in his teens, he was dispatched by his parents to a Utah-based ‘educational facility’ operated by “World Wide Association of Specialty Programs” that, according to public records, “is in the business of serving desperate parents of troubled youths and specialized in improving the students’ aberrant social behavior..” Per link above, fugitive Katz and Alyson Katz (Andrew Katz’s mother) were members of a class-action lawsuit brought against “WWSPS”. (That suit was dismissed in 2011).

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), Matthew Krueger (c) and CIO Dylan Knight

According to informed sources, soon after his disappearance last week, Katz has purportedly commenced a series of death threats against a separate individual (and immediate family members), who is a victim of financial fraud that Katz and partner, Matthew J. Krueger of San Francisco committed back in 2019. That victim has since assisted law enforcement in pursuit of criminal charges against the Seaquake executives, and it is believed the [purported] death threats that came from Katz (“purportedly, yet with high probability”, according to law enforcement officers familiar with the matter), are part and parcel to a lengthy history of intimidation tactics that Katz has exacted on those in retribution for filing charges against him.

To the amazement of those interviewed and familiar with the apparent criminal activities of Katz, Krueger, and associated entities, the individuals’ profiles, and respective current Seaquake.io executive roles remain displayed and promoted on LinkedIn (e.g. Andrew Katz, Founder & CEO; Matthew Krueger, “Partner & CFO” and the company’s website continues to publish “updates” that suggest “the firm offers a range of fintech applications and services to the cryptocurrency industry”.

Most recent updates to that website promote news that funds managed by Crypto Industry Pioneer Brock Pierce‘s Percival Ventures, along with those from Blockchain Founders Fund, whose senior principal is Aly Madhavji, are investors in Seaquake. Both Pierce (now referred to as the Prince of Puerto Rico, as well as being a 2020 presidential candidate) and Madhavji are displayed as Advisors to the company on the Seaquake website. Neither of these individuals or members of their firms has responded to outreaches by MarketsMuse for them to confirm or deny the information displayed on the Seaquake.io website.

NYPD TIPS Program is Offering a Reward for information that leads to the arrest of Andrew Katz. Anyone with knowledge of Katz’s whereabouts should contact the NYPD by phoning 800-577-TIPS, or via the TIPS website

As to the charge of Aggravated Harassment, according to multiple sources, this particular charge is consistent with a behavior pattern that Katz has perpetrated repeatedly over the past several years against various people (unrelated to the current charges). No less than four individuals who have had ‘run-ins’ with Katz, including former landlords, relatives, and aggrieved investors have each independently contacted MarketMuse to share respective incidences in which Katz has tormented them with physical threats via voice message and text messages sent by ‘burner phones’, as well as defamatory messages that Katz has posted on social media platforms, all in effort to intimidate these individuals in retribution for legitimate complaints they had made against him in various jurisdictions.

andrew-katz-matthew-krueger-seaquake-investor-fraudAs reported previously Katz and Krueger (pictured left) who also still promotes himself on LinkedIn and on the company’s website as Chief Financial Officer for Seaquake), have both been labeled “the Crypto Kleptos” and The Seaquake Slime Boys” by several people interviewed. Rumor is they are both facing a pending list of other criminal matters, including SBA PPP bank loan fraud. Public records indicate that Mssrs. Katz and Krueger applied for a PPP loan for Seaquake OPS LLC, a Wyoming entity that Seaquake corporate presentations have identified as one of several Seaquake companies. Seaquake OPS LLC did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, in May, 2020.

elon musk self immolation nft artwork

Elon Musk Plans Self-Immolation to Create NFT Artwork; Pre-Auction Bids of $5bil

From the Believe It or Nuts Department: Elon Musk, aka Technoking of Tesla and SpaceX boss, has tweeted that he will create an NFT Digital Video Artwork that showcases his self-immolation. Tesla CFO Zack Kirhorn, who just changed his corporate title to Master of Coin, will wrap the video with an NFT (non-fungible token) for Dogecoin (CRYPTO:DOGE).

Entrepreneur Mark Cuban tweeted that he is already weighing an opening bid of $5bil dogecoin to become the proud owner of Musk’s digital art. Not to be outdone, Social Capital founder Chamath Palihapitiya, aka The SPAC King, has already dismissed Cuban’s plan and has filed an S-1 for a $50bil Special Purpose Acquisition Company that will focus on rolling up NFT Art. A source at Palihapitiya’s Social Capital, who is not authorized to comment on securities filings, said “NFTART Acquisition Corp. will be the biggest SPAC biggest ever, and it will be the planet’s most valuable stock when you consider the underlying assets we will acquire, including the Musk self-immolation piece.”

Musk Says “We’re Burning Down The House”

According to sources, cryptocurrency exchange Crypto.com has pushed its plan to create an NFT marketplace for top artists and will launch Friday Mar 19 in order to be the primary auction platform for Elon Musk’s “greatest piece of work ever”.

Once an obscure part of blockchain technology, NFTs have boomed in recent months thanks to the embrace of almost all corners of the art, entertainment, and media worlds. 

In case you’ve been asleep for the past weeks, Wikipedia explains that non-fungible token (NFT) is a digital file whose unique identity and ownership are verified on a blockchain (a digital ledger).[1][2] NFTs are not mutually interchangeable (see fungibility). NFTs are commonly created by uploading files, such as digital artwork, to an auction market. This creates an entry on the blockchain’s digital ledger which includes a reference to the cryptographic hash of the digital file which the NFT represents. The tokens can then be bought with cryptocurrency and resold.

Pre-IPO Crypto Futures Options for the April 1 $60bil strike price for Social Capital’s SPAC are already trading at $10mil per contract.

Are you following former hedge fund trader Larry Benedict’s daily $SPX trading ideas? “Go Home Flat 201”

Trade along with the trades Larry is making.

Thomas Petterfy, founder and Chairman of online brokerage Interactive Brokers said, “If people want to trade it, we will list it, although margin requirements will be set at 500x the typical margin needed, just like we do for options in GME.” Interactive Brokers is also increasing its referral fee from $200 to $2,000 for customers who refer new accounts to the Professional’s Gateway to the World’s Markets.

If you are looking for a crazy but very true story from the crypto crime division, this exclusive coverage will really set your hair on fire!

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com

social-capital-latest-spac-SIDS-Acquisition-Stupid-Vaccine-Maker

Social Capital SPAC Machine Latest: $500m Blank Check Company to Roll-Up Makers of a Stupidity Vaccine!

Social Capital SPAC factory run by SPACmeister, notorious Tweeter and promoter of RedditArmy favorite stocks Chamath Palihapitiya is rumored to have filed a confidential S-1 for his latest Special Purpose Acquisition Company, (aka SPAC). The entity is to be called SIDS Acquisition Corp. According to sources, @chamath aims to focus on “biotech companies that are creating vaccines for those who suffer from acute stupidity”. The acronym is a play on Forrest Gump’s famous line: “Stupid Is as Stupid Does”

From the “believe it or is it nuts?” news department, Palihapitiya, who is also Chairman of Spaceshot SPAC VirginGalactic has assembled a board of biotech innovators, famous billionaires, notorious disruptors, and finance industry geniuses to identify and ferret out SPAC merger candidates. From the biotech world, Theranos co-founder Elizabeth Holmes will be in charge of due diligence, Mark Cuban and Elon Musk will oversee funding strategies, and CNBC host Jim Cramer will serve as the designated head of PR, Communications and “P&D”. Famous financier Max Bialystock is slated to be the CFO for the new blank check company.

social-capital-latest-spac-SIDS-Acquisition-Stupid-Vaccine-Maker
SIDS Acquisition Corp Executive Team

According to unconfirmed sources, SIDS Acquisition has already engaged online trading platform Robinhood to include this listing in a new “private share offering module for the masses” that will offer access to buying the SIDS SPAC on a pre-IPO basis. Elon Musk is said to be overseeing a pact with soon-to-IPO “Coinbase” so that bitcoin and dogecoin can be used by the RedditArmy and others to purchase pre-IPO futures contract in the latest Social Capital SPAC.

Noted Peter Thiel, one of the sharpest early-stage investors of this generation, is said to be getting his checkbook ready for this blank check company and plans on deploying $100 million. Said a spokesperson for Thiel, “If there was ever a moment in history when there should be a vaccine for stupidity, this would be it!”

MarketsMuse Editor Caveat Emptor: Yes, the above news story is fake news and intended only to parody the current cycle of craziness, stupidity, and speculation taking place across the US equities market.

NOT FAKE NEWS: UPDATE TO “SEAQUAKE CRYPTO SCAMMERS” and Andrew R. Katz, “CEO”

andrew-ross-katz-arrested-apr 1 2021 miami florida
Andrew Ross Katz-“Crypto Entrepreneur” Mug Shot Photo April 2021 Arrest Florida
andrew-katz-seaquake-felony-assault-charge-new-yhork

“Crypto-Trading Firm” Founder Andrew Katz Now Faces Felony Assault Charges

Andrew Katz aka Ross Katz aka Stark Katz, the co-founder of so-called digital asset infrastructure and crypto-currency trading firm Seaquake.io, who along with his partner Matthew J. Krueger of San Francisco and UK citizen Dylan Knight are facing investor fraud charges, is now slated to appear in New York Criminal Court April 30 to answer one count of felony assault, one count of grand larceny and one count of aggravated harassment. Katz, whose bail was set at $200,000 had him posting $100,000 in cash, which sources believe to have emanated from funds that Katz and his partner Matthew J. Krueger of San Francisco hoodwinked from a Florida-based family office 18 months ago.

andrew-katz-matthew-krueger-seaquake-investor-fraud
Seaquake’s Matthew Krueger (L), Fugitive Andrew Katz (R) http://www.seaquake.io)

FEB 12 2022 UPDATE: ANDREW KATZ CONVICTED OF ASSAULT CHARGES IN NEW YORK; FLEES AND FORGOES $200K BAIL; NOW A FUGITIVE WANTED BY NYPD

Reward Offered For Information Leading to Apprehension of Founder of so-called “crypto trading and digital asset infrastructure firm”. DO NOT APPROACH SUSPECT: CONTACT NYPD AT 1-800-577-TIPS, OR SUBMIT TIP TO CRIME STOPPERS WEBSITE VIA THIS LINK

READ THE JUNE 2022 UPDATE HERE

The case document is via New York Court System Case CR-02020482-20NY, The victim of the assault is Katz’s now-estranged wife, Selen Katz, a Turkish immigrant who appears to make her career as an Instagram fashion model.

Felony Assualt Victim, Selen Katz,

Defendant Katz, who apparently still promotes himself on the firm’s website as co-founder of the so-called digital asset infrastructure company “Seaquake.io” was arrested this past November in New York and now faces 2nd Degree Felony Assault Charges (a class D felony), one count of Grand Larceny ( an E Felony) and one charge of aggravated harassment. If Katz is found guilty or if decides to plead guilty and save the court system the aggravation of having to deal with him, he could be sentenced to a minimum of 2 years in prison.

Katz and Krueger, who have been labeled “the Crypto Kleptos” and The Seaquake Slimeboys” by several people interviewed, are also said to be facing a pending list of other criminal matters, including SBA PPP bank loan fraud. Public records indicate that Mssrs. Katz and Krueger applied for a PPP loan for Seaquake OPS LLC, a Wyoming entity that Seaquake corporate presentations have identified as one of several Seaquake companies. Seaquake OPS LLC did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, in May, 2020.

Whether Katz or Krueger (or jointly) prepared the loan application when listing employees, Katz’s estranged wife was identified as the company’s Creative Director (whose employment with Seaquake, according to her LinkedIn profile, started in April of 2020. Informed sources have since indicated that Ms. Katz had no recollection of ever having created a LinkedIn account, and has stated she was never an employee of any Seaquake entity. According to police records in Los Angeles and New York, the current assault charge is the latest in a series of at least five prior domestic abuse arrests for Katz.

Manhattan District Attorney’s office would not provide details as to Katz’s current place of residence, yet he is suspected of squirming through an assortment of Airbnb rentals in Southern California while awaiting his April 30 court appearance, as well as New York City. In various documents, Katz also lists residences in Arvada Colorado (belonging to his parents Ken and Alyson Mahl Katz), and he lists addresses in California and Florida in various bank account documents obtained by court order. According to public databases, Katz has prior assault charges, along with charges of harassment, breaking and entering, and stalking throughout the past several years.

In the Florida securities and investor fraud case, in which defendants Katz and Krueger are charged with defrauding a Family Office it’s alleged that the Seaquake Slimeboys (mis) represented they were operating a start-up business and told investors that their several hundred thousand dollar investment in August 2019 “was for balance-sheet purposes only and to show pending venture investors the company did have other investors and assets on the balance sheet”. Communications sent by Katz to the investors indicated a small portion of the capital would be deployed to a proprietary “high-frequency trading” application for crypto currencies.

Alas, there were no pending VC investors, and there was no actual trading application. Katz and Krueger moved the investor funds from one bank to another, and then to a Coinbase account, and thereafter to crypto exchange Binance. It is easy to suspect that Katz and Krueger (a former PayPal employee fluent in cryptocurrency) have been enjoying the 6-fold increase in the price of bitcoin since the initial investor fraud took place.

marketsmuse-greed-is-good-day-traders-crypto-scam-seaquake

Amateur Day Traders Liberate The Markets-Making The Rich Richer

“Amateur Day Traders” by the tens of thousands who are taking tips from #reddit and #daytrading rebels, and particularly, the financial market anarchists who believe you are inflicting pain on fat cat wall street hedge fund traders by squeezing their shorts and bidding up share prices of distressed or challenged companies (e.g $GME, $AMC and others) to astronomical prices, here’s the new flash: you are all actually making the rich richer.

YOU want to “stick it to the man” (i.e. wall street and hedge funds) by taking your stimulus money and unemployment checks and take it to a gambling casino where you can bid up shares in what any 8- year old would argue are grossly overvalued stock prices. That’s fine, because you think the shares you are all buying in unison is going to create a short squeeze and hurt professional investors who have bet against obscene tulip bulb style speculation.

Notorious Shark Tank Wizard Kevin O’Leary loves you. Elon Musk is cheering you on. Even the progressive politician Representative Alexandria Ocasio-Cortez is in favor of your being able to join the new generation of day traders to compete and bet alongside Wall Street professionals, who have been playing this game for years, but you were “excluded”.

What you don’t seem to get is that while your stock and option purchases are driving up the price, every share you purchase is making “the man” billions. Private Equity lenders-who extend loans to the distressed companies on your ‘short squeeze’ target lists made those loans with their having the option to convert the company debt into shares. So, now they are converting that debt into shares and selling those shares to YOU at grossly inflated prices.

Perfect example: $AMC lender Silver Point Capital (the fat cat capitalist firm run by multi-millionaires living in mansions in Greenwich CT) and the firm that makes high interest loans to distressed companies) made $100million in two days ON TOP OF the principal amount of their loan) thanks to the financial market geniuses who are playing musical chairs. And, thanks to you folks, the movie theater chain that was next to bankruptcy last month, sold $300million in stock at share prices the company had never enjoyed in the very best of their times to YOU! Sure, when the pandemic is over, all of you are headed straight to the movie theaters so you can spend $50 for tickets and a box of popcorn and share the crowdsourcing experience with your peeps. What are you going to do with your 70 in TV screens and your streaming subscriptions? Oh, you’ll keep it all with the profits you made day trading? Sounds good

Don’t believe that your intent to cause pain to the rich wall street fat cats is backfiring a smidge? Try reading the facts.

And, the company executives who own shares in these companies are now celebrating, as this is their once in a lifetime opportunity to sell those shares to morons who have put nonsensical prices on them… once the Reddit community starts looking at insider share sale activity (when they are reported at end of the quarter), maybe you’ll scratch your heads and ask yourselves “what the f–ck” did i accomplish, other than turn millionaire executives into billionaire retirees?

Think this is nonsense? OK, Chewey.com founder and recent Board Member for GameStop made $3.6 BILLION in four days this past week–all thanks to the folks who are hoping to “stick it to the man” and other millionaire “capitalists” in some kind of “Occupy WallStreet 2.0” initiative.

Perspective: GameStop’s CEO George Sherman, who Ryan Cohen had said was “out of touch with the new movement toward e-commerce” and proceeded to buy 10% of the company at $7 in November and joined the board in effort to help them pivot), made $400mil this past week. The guy who is out of touch made $400 million in three days, thanks to the RobinHood and Reddit Day Traders Rebellion. Meanwhile, GameStop stores remain shuttered, hundreds of furloughed employees remain out of work, and video gamers are stepping up their purchases at alternative online stores-or buying direct from the manufacturers.

GameStop does not make electric cars, they don’t manufacture magic mushrooms, they are a 30 year old retail store. Ok, when the pandemic is over, one hundred million redditers are going to flock to those stores and buy new stuff. Sure you will.

On behalf of all of the fat cat private equity firms and distressed lenders who have made really big bets on distressed companies with bleak futures, you are to be thanked for making them even richer.

“Creative Designer” for Crypto Fraud Firm Seaquake.io”https://www.linkedin.com/in/selen-katz-0043821a0

Now you should get sucked into a real scam..Click on left image..Go ahead!

When the music stops (meaning when the prices of the shares you bought at wildly inflated prices) fall back inside of 10 seconds to realistic prices that make sense (based on the real value of the company; as measured by sales, profit margins, net income, and assets vs. liabilities), all of you crusading day traders who were determined to screw the establishment will inevitably lose your money in this “occupy wall street v.2.0” campaign folly.

Or, you will have unloaded your shares on the way down to another “comrade in arms” and “believer in the cause” who is as misguided as you. Ever heard of the “greater fool theory”.

Not a very altruistic thing to do to a fellow comrade in arms, but you really don’t care, do you?

Because you are not a crusader, you are not aligned with a movement, you merely want to be included in the new generation of maverick day traders and turn a quick profit so that you can invest in another fractional bitcoin.

BTW- anyone who has the notion to join a mob and storm the SEC building in Washington to protest trading halts when share prices move to extremes, you should ask your parents (or your baby sitter, or your parole officer) whether that makes any sense.

Good luck and God Bless the next generation of ‘online traders’ whose objective is to screw the establishment. Remember, GREED IS GOOD!

When you discover first hand that your behavior left you down and out, you can hope that those fat cats will have a job for you to clean their back-up swimming pool in their 3rd luxury home.

Or MarketsMuse will be happy to hire you to post to their financial industry news platform

gamestop

GameStop Stock Surge Explained

GameStop Corp (NYSE:GME) $GME share trading during the past days has, if you’ve somehow not heard, proven that an un-coordinated assembly of day traders, enabled and empowered by social media platforms Reddit and WallStreetBets can accomplish what the mob that attempted to take over the capitol in Washington DC could only dream about. Financial Market Anarchists will be the new normal.

By banding together in chat rooms, online forums and Twitter, thousands of novice gamblers have partied together and encouraged each other to buy shares and stock options in GameStop, a company that has merely 70 million shares outstanding and one that has typically reported operating losses for the past 8 quarters, including the most recent, in which the company reported a loss of $63million on $1billion in sales. Despite the anemic business results, the stock price has soared from its Jan 11 price of $20 to over $365 in after-hours trading Jan 27.

ponzi scheme gamestopHysteria? Stock Manipulation? Irrational Exuberance? Pump and Dump Scheme? Ponzi Scheme? Collusion? There are dozens of adjectives being used by the universe of long-time stock market investors, so-called Wall Street research analysts, and the many pundits appearing on CNBC. “The crazies have taken over the lunatic asylum” according to skeptics who can’t fathom the notion that GameStop, which has traded at $1billion-$2billion market throughout the past 10 years, can become a $35billion market cap inside of two days. The stock is up 3500% within the past 12 months

That said, GameStop, which has a 35 year operating history and first came public in 2002 is a Fortune 500 company. It is best known for operating a chain of 5000 retail stores that sell video game devices and other paraphernalia for video gamers is, according to some people, poised to get to the other side of the grueling hit to their business inflicted by the Covid-19 pandemic by shifting to a full-scale digital business model.

Yes, two weeks ago, the company brought on Chewy Inc (NYSE:CHWY) CEO Ryan Cohen to serve as board member. Cohen took his pet food company public 18 months ago at $35 per share and his company’s stock has soared to over $100 in recent trading.

This is good news for GameStop, we suppose. We can also suppose with 100% confidence that GameStop will exploit the current mania for its stock by selling many millions of shares at the recent inflated prices. Wall Street traders are guessing that GameStop could float 10million shares without impacting the recent price, and take in several billion dollars of cash into its treasury. They could pay down the entirety of their outstanding debt (approximately $1billion) and have several more billion to play with. In fact, the company could start to manufacture tulip bulbs and its likely they will sell billions to their old and their newest fans.

Does $2billion in cash on their balance sheet, and operating losses predicted for the next few quarters equate to an enterprise value of $30 billion? Why not? The stock market has been over-run by GenZ day traders whose only concept of investing is following the herds on social media and perhaps more important, banding together to prove the Wall Street analysts and short-sellers know nothing and deserve to be humiliated. 

Unlike down and out scammers such as crypto criminals Andrew Katz and Matt Krueger (profiled here previously), anyone who believes the SEC can stop online forums for serving as the military headquarters for what seem like bandit stock and option traders is wrong. Hell will freeze over before regulators can try to stop what is taking place in the financial markets. Get out of the way dinosaurs, if you’re a short-seller, you’ll be extinct before this party comes to an end.

PPP Loan Fraud

PFE Covid-19 Vaccine: Will Biden Now Go After SBA PPP Loan Scammers

With today’s announcement from Pfizer (NYSE:PFE) indicating they are that much closer to a Covid-19 vaccine, its time to look forward to who the Biden administration will appoint to prosecute the tens of thousands of SBA PPP loan scammers who reaped tens of billions after the Trump administration made it a simple feat to fill out a form and run with the money.

The SBA has recently published a list that contains thousands of companies that received over $150k each. Many received several million dollars. And, the SBA is scheduled to release an even more comprehensive list comprised of tens of thousands of companies that received less than $150k. The current list and the one soon to come out provides a roadmap to criminal enterprises and unsavory categories.

Propublica is making the interrogation easy for amateur sleuths.

Take for example a company known as SOSV Payroll LLC, and its interesting connection to a company profiled here last year, “Seaquake.io”, which appears to be not much more than a spiderweb of intertwined shell companies that claims to build software applications for trading cryptocurrency. Our prior reporting has led most to appreciate that if it looks like a duck, walks like a duck and quacks like a duck, it is a duck, and within the context of investor scams, Seaquake is the queen of ducks, especially when its former business development executive stated “they sell nothing but vaporware and nobody has bought it, other than investors who were deceived into buying into the company.”

SOSV Payroll is a Delaware entity with a principal office in Princeton, NJ and according to corporate filing records, is structured as a “Foreign Limited Liability Company.” The company also registered with the State of Colorado in February 2019. According to SBA PPP loan application documents filed in April 2020, they say they have 30 employees. The SBA PPP loan was approved and made via First Republic Bank for somewhere between $350k-$1million.

Of interest, this entity is a direct affiliate of Ireland-based venture fund “SOSV, The Accelerator VC”, which claims to have $700m in AUM. Soon after receiving the SBA loan, SOSV announced they made a direct investment in the above-mentioned Seaquake.io, a holding company with multiple corporate shells including in Colorado. More relevant, Seaquake has been a defendant in multiple actions, including allegations of investor fraud brought against Seaquake CFO Matthew Krueger and co-founder Andrew Ross Stark aka Ross Stark aka Stark Katz. According to criminal background searches, Katz has a lengthy history of charges ranging from breaking and entering to domestic violence to stalking.

UPDATED MARCH 2020: Add a bank loan fraud perpetrated by Katz and Krueger in connection with Seaquake OPS LLC, a Wyoming entity that is part of the web of Seaquake companies. Recently discovered, Seaquale OPS LLC did in fact apply for and did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, which was approved in May, 2020. In that loan application, Selen Katz, former wife of Andrew Katz, and the victim identified in the felony assault charge is identified as an employee of Seaquake. Her title, according to a LinkedIn profile is “creative director” and her date of employment is the same month in which the PPP Loan was applied for.

We don’t know why an affiliate to a $700m AUM Ireland-based venture fund needed to apply for an SBA PPP loan. We don’t know if it’s kosher or not. We do know that the SBA PPP loan program has been exploited by tens of thousands of firms. How or if President-elect Joe Biden and his Vice President, Kamala Harris, the former California Attorney General will be able to claw back and/or prosecute those who submitted false loan documents and received taxpayer money is a question that may never be answered. The good news is that detailed data regarding more than $100bil in loans handed out, including the business names and addresses pertaining to the millions who received loans in amounts under $150k is expected to be released in December.  

The above-referenced Seaquake enterprise (first exposed by MarketsMuse last October after Law360.com published a federal lawsuit against the company and its principals) also has corporate shell registrations in California, Wyoming, Florida, and the United Kingdom (at last count). According to confidential sources, at least two of its subsidiaries will be unveiled for having received SBA PPP loan support, despite former insiders acknowledging the company has no product, has no customers, and no documented salaried employees, other than Mssrs. Katz and Krueger, and in April (immediately prior to submitting loan applications), a new LinkedIn profile indicated this company added a “creative designer”, who also happens to be co-founder Katz’s wife. Ms. Katz also appears to be a fashion model and Instagram influencer, according to her profile at www.instagram/seloupe.

Now that Pfizer appears to be one step closer to solving the Covid-19 vaccine crisis, one can hope that we will all go back to business, including SBA, IRS, and state fraud investigators, who can focus on bringing SBA loan predators to justice.

andrew-katz-matthew-krueger-seaquake-investor-fraud

SBA Bailout Funds Going to Firms on FBI Watchlist

PPP and EIDL Fraud is as rampant as COVID-19. According to the front page story appearing in the New York Times April 26 edition, hundreds of millions of dollars in SBA bailout funds that were intended by the US Treasury to assist small businesses impacted by COVID-19 via the Paycheck Protection Program and EIDL Loan Program have been siphoned off by public companies, private equity-backed companies and thousands of small businesses, many of the latter don’t really exist other than in name only.

To many financial crime investigators who are fluent in the failings of US government’s effort to support businesses that have suffered from the pandemic, it is no surprise that tens of millions of dollars have gone to scamsters and fraud artists, including those who have been recently indicted or have been under investigation by federal law enforcement and federal and state regulatory agencies.

Shocking?! Nah. According to one senior investigator from The Financial Crimes Enforcement Network (FinCEN) “However well-intended, the PPP and EIDL loan programs created the perfect opportunity for serial financial fraud artists to exploit loopholes that a teenager could drive a Boeing jet through. PPP and EIDL fraud is rampant.”

In addition to the assortment of rogues that were outed in the above-referenced NYT coverage, it appears that individuals running a so-called fintech company called Seaquake.io, which claims to “specialize in digital asset infrastructure” along with “crypto currency trading applications” and profiled here and other online media outlets back in October, are back at it again.

Informed sources have indicated having direct knowledge that Seaquake.io principals Andrew Katz and Matthew Krueger, who have been cited in federal court for an assortment of investor fraud and wire fraud allegations, had recently filed SBA loan applications for as many as six different Seaquake entities, including Colorado-registered Seaquake Inc., Seaquake Manager LLC, Seaquake LP, Wyoming-based Seaquake OPS LLC, and a California entity, Seaquake Capital LP. Each of these entities list both Andrew R. Katz and Matthew Krueger as controlling officers.

And, it was revealed that Seaquake OPS LLC, the above-referenced Wyoming entity did in fact apply for and did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, which was approved in May, 2020.

AVEM Ventures LLC, a Colorado entity identified along with each of the above in a federal civil court action, lists Katz as the controlling officer and a Kenneth S. Katz as the registered agent. This entity is also believed to have applied for loans and grants intended for businesses that have been impaired by the COVID-19 pandemic.

There is only one problem, the company is a scam, according to a former business development executive for Seaquake, who worked for the company while he was also registered with Finra as a senior executive for San Francisco based brokerdealer US Capital Global. That former employee (his tenure lasted all of 7 months and he has since moved to the role of ” Director, Digital Wealth Solutions” for Apex Clearing Corp.” has stated “Seaquake is not a real business; the product(s) they claim to have are “nothing more than vaporware”; they have no employees drawing salaries other than Katz, (who recently added his wife Selen to the ‘payroll’, though it would appear that her full-time job is that of an Instagram influencer, along with Krueger and UK-based Dylan Knight, who is listed as the chief technology officer on corporate documents. This is all despite claims made on the company website as to having multiple employees; “a canard”, according to one source who says the “serial fabrications made by the company are advanced further by fraudulent representations made in an assortment of investor solicitation documents the company has sent to dozens of individuals and fund managers.”

andrew-katz-matthew-krueger-seaquake-investor-fraud
Seaquake’s Matthew Krueger (L), Andrew Katz (R)

Katz was seen in December vacationing at a resort in Cabo with his swimsuit model wife, a Turkish national whose opportunity to apply for US citizenship comes on the third anniversary of their marriage, August 2 2020. How the US Immigration and Naturalization Service (INS) or Department of Homeland Security view applicants who are married to accused money launders is only something those agencies can respond to. In early March 2020, the couple was spotted posing for photos on the beach in Southampton, New York. It is rumored that Katz is now hiding out in New York City. Neither he or his San Francisco-based partner Krueger, both accused of defrauding at least several investors, including a Florida-based family office this past August, have made themselves available for comment.

The San Francisco branch of BBVA Compass Bank, the bank of record for an assortment of Seaquake enterprises, had no comment has to whether they facilitated EIDL loan processing or payments to the Seaquake’s alleged criminal enterprise.

One can only hope that FBI and SEC efforts lead to a long-term quarantine for these individuals.

digitalassets-cryptocurrency-trading-fraud.

Another Cryptocurrency Trading Scam-Former NYSE Floor Broker Charged

In a scheme that reads much like the MarketsMuse story published in October profiling so-called digital asset firm Seaquake.io, whose principals Andrew Katz and Matthew Krueger fraudently claimed to be operating a high-frequency trading system for cryptocurrencies, Michael W. Ackerman of Ohio, and a former NYSE floor broker, was charged yesterday by the US SEC, the CFTC and the US Attorney for the Southern District of New York for defrauding investors out of $33million in the course of operating cryptocurrency trading scam.

Ackerman, much like Seaquake’s Katz and Krueger, provided investors with phony documents that claimed his firm’s two entities, Q3 Trading Club and Q3 I LP, operated a HFT trading firm that developed a “proprietary trading algorithm” for trading cryptocurrencies. As it turns out, Ackerman, along with with two other defendants charged in the case, used their investors’ funds to purchase homes, cars, jewelry and other personal items. One can only guess that Katz and Krueger of Seaquake stole Ackerman’s playbook for how to defraud investors, as Ackerman apparently first advanced his scheme in 2017 and continued until 2019 according to the charges.

While Katz and Krueger have not yet been hit with criminal charges in their cryptocurrency trading scam, the Ackerman timeline would suggest that the Seaquake operators, who still maintain a company website and are purportedly still soliciting investors, can expect an early morning knock on their doors sometime soon.

The Ackerman Q3 saga has been reported by multiple outlets.

SEC’s complaint

Michael Ackerman allegedly raised $33 million in a fraudulent crypto trading scheme. Further, Ackerman and his two partners misled investors by claiming they had developed an extraordinarily profitable crypto trading algorithm. One of the partners was a doctor. (CrowdFundInsider)

According to the SEC, around 150 investors, including many in the medical fraternity, lost money in the alleged fraud. The perpetrators floated Q3 Trading Club and Q3 I LP – two entities that enabled the digital currency investment offering.

The SEC also alleged Ackerman used most of the money raised from the hapless investors to buy jewelry, cars, and to purchase and renovate a house.

Moreover, he lied to investors about the profitability of his trading, the status of the funds and their safety.

He “doctored” computer screenshots of trading accounts to give a false impression that they held as much as $310 million.

“Ackerman exploited popular interest in digital assets as a means to obtain millions of dollars for his personal use,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

andrew katz-matthew krueger-seaquake.io fraud

Seaquake.io Fraud; So-Called Crypto Trading Firm Makes Investor Money Disappear, Founder/CEO Disappears After Conviction in New York Criminal Court

(Source: Law360.com ) Andrew R. Katz, aka Ross Katz, aka Stark Katz  an Arvada, Colorado man who is last known to reside in either of New York City or Southern California, and uses California, Colorado, Florida and New York drivers licenses while claiming to be a former FX trader for EFG Bank, and who now presents himself as co-founder of  Seaquake.io, a”digital asset infrastructure company”, along with Seaquake CFO Matthew J. Krueger of San Francisco, who claims to be a former PayPal “Finance Manager” and the former “Head of Finance” for Venmo, have both been named as Defendants in a Federal Court complaint alleging the two men advanced a systematic scheme to defraud a Florida-based investor group. Also named in the action is Dylan Knight, a UK man who is listed as a co-founder and Chief Technology Officer for the company. The Federal Court complaint cites multiple accounts of securities fraud, fraud in the inducement, and wire fraud.

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

FEB 2022 UPDATE: ANDREW KATZ, CEO OF ‘SEAQUAKE.IO’ CONVICTED OF ASSAULT IN NEW YORK; SKIPS $100K CASH BAIL AND NOW A FUGITIVE SOUGHT BY NEW YORK POLICE CLICK HERE FOR UPDATE

JUNE 2022 UPDATE-SEAQUAKE COHORTS STILL SCAMMING

Andrew Katz Latest Arrest: April 2021 Miami Florida; 11 Counts

andrew-ross-katz-arrested-apr 1 2021 miami florida
Andrew Ross Katz-“Crypto Entrepreneur” Mug Shot Photo April 2021 Arrest Florida

According to a Zurich-based private equity fund manager who had been repeatedly approached by Katz to invest, “All of the patented elements of old-fashioned investor fraud have been perpetrated by these Seaquake characters, casting yet another shadow of skepticism on the entire digital asset industry. It is amazing how brazen these individuals are. Based on their apparent actions, one can hope that law enforcement officials will do their jobs and prosecute these people quickly. Even if the wheels of justice spin slow, anyone in the industry should be alert to these people and be aware they have already destroyed any future professional career in any industry.”

seaquake.io crypto scam-andrew katz-matthew krueger-dylan-knight
Seaquake.io principals Andrew Katz (l), “CFO” Matthew Krueger (c), CIO Dylan Knight (r)

According to the Federal Court complaint, Katz lists former jobs at UBS Bank and EFG Capital in investor offering documents, the company’s website, as well as his Linkedin profile, despite Finra having no record of Katz being licensed by that securities industry regulator at any time, and despite EFG Capital having no record of his employment. More importantly, the court filings include a series of email communications, text messages, and group chat messages on Linkedin in which Katz and Krueger made a series of fraudulent representations that induced the investors to enter into a so-called “SAFE Agreement” with the company. Investors were of the belief the funds would be deployed to a high-frequency trading application that Seaquake principals, including so-called CTO Dylan Knight of the UK, claimed to be operating.

JANUARY 2021 UPDATE: SEAQUAKE CO-FOUNDER ANDREW KATZ CHARGED WITH FELONY ASSAULT AND GRAND LARCENY IN NEW YORK; FACES MINIMUM 2 YEAR PRISON SENTENCE

BREAKING NEWS FEB 2022 UPDATE

ANDREW KATZ, CEO OF PURPORTED CRYPTO FIRM “SEAQUAKE.IO” CONVICTED OF ASSAULT CHARGES IN NEW YORK AND FLEES, LEAVING BEHIND $100K CASH BOND; NOW A FUGITIVE SOUGHT BY NEW YORK POLICE

CLICK HERE FOR LATEST

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

According to the complaint, only several days after the investors executed the agreement with the company and wiring funds to a Seaquake account at Signature Bank in New York, Katz then informed the investors the high-frequency trading application was “not in fact in production and the [investor] funds would be placed into a money market account until such time as the software was ‘production ready.” Defendants Krueger and Katz also made a series of assertions as to pending institutional investors who committed to providing capital to Seaquake, all of which turned out to be false, according to the filing. According to court documents and independent background searches, it turns out that Katz has driver licenses in New York, Florida, Colorado, and California, and is also registered to vote in Florida.

UPDATE MARCH 2021: SEAQUAKE ENTITY ‘SEAQUAKE OPS LLC’, A WYOMING CORPORATE SHELL NOW SUSPECTED OF SBA LOAN FRAUD; APPLIED FOR AND RECEIVED PPP-RELATED LOAN

This latest charge adds to a pending list of other criminal matters, including a likely bank loan fraud perpetrated by Katz and Krueger in connection with Seaquake OPS LLC, a Wyoming entity that is part of the web of Seaquake companies. Recently discovered, Seaquale OPS LLC did in fact apply for and did receive a Paycheck Protection Loan of $22,813 through Wells Fargo Bank, National Association, which was approved in May, 2020. In that loan application, Selen Katz, former wife of Andrew Katz, and the victim identified in the felony assault charge is identified as an employee of Seaquake. Her title, according to a LinkedIn profile is “creative director” and her date of employment is the same month in which the PPP Loan was applied for.

Katz has a history of criminal charges, from trespassing charges in New York to domestic abuse charges in Los Angeles. This private investigator’s background report is telling. Other background searches indicate that Katz, along with his mother, Alyson Katz of Arvada, Colorado were plaintiffs in a class action law suit brought against a Utah-based school for emotionally-challenged youth, a facility that Katz was apparently sent to by his parents and attended for at least two years while he was a teenager.

If only Andrew Katz’s wife, Selen Katz, a Turkish national and Instagram Influencer who apparently works as a swimsuit model, didn’t need Katz to help her secure a Green Card. Otherwise, perhaps she’d realize that being married to a scam artist is not the path to a happy future in the U.S. More important, actions pending against Katz could raise eyebrows from US immigration authorities who will be evaluating her request for citizenship. She should hope that more recent frauds committed by her husband and his partner in connection with PPP loans don’t add fuel to the criminal investigation fire burning under their butts.

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

Back to the primary coverage….Once the investors realized they had been scammed and then demanded the return of the funds, Katz and Krueger took steps to dissolve “Seaquake Partners LP”, the corporate entity the investors sent their funds to, according to the corporate register agent. According to records in the filing, Defendants Katz and Krueger wrote to the investor informing “we will not communicate with your attorney and we have no obligation to provide any further information..” Concurrently, the Defendants transferred the investor funds from the company account at Signature Bank in New York to multiple, newly-created Seaquake entity accounts at a Compass Bank BBVA branch in California, near where Krueger lives. Thereafter, bank records indicate Katz and Krueger dispersed the funds to various internal company accounts, and then transferred a bulk of the investor’s funds to crypto exchange Coinbase, which they moved days later to crypto exchange and custody platform Binance.

As acknowledged by the defendants’ attorney, Yasin Daneshfar of Florida law firm Becker and Poliakoff, Katz and Krueger also moved tens of thousands of dollars to personal accounts the defendants established at Compass Bank. Attorney Daneshfar argued “the so-called “SAFE Agreement” did not preclude the defendants from dispersing the money as they saw fit.” Daneshfar further acknowledged in a recent court appearance that, in addition to the defendants enriching themselves with much of the investor’s funds, the investors’ funds have also been used by Katz and Krueger to pay the Becker law firm in their effort to defend themselves against the investors in federal court. When challenged with this use of funds by the federal court judge who pointed to the series of communications from Katz to the investors, Attorney Daneshfar was said to have responded to the judge with a smirk and a shrug of his shoulders.

While much of the information obtained in the federal court filings may seem to be the source of good fodder for a ten cent crime novel, according to one Switzerland-based venture capital executive who is focused on the digital currency space and who had also been solicited by Seaquake to serve as both an advisor and to provide investment funds, “All of the patented elements of old-fashioned investor fraud have been perpetrated by these Seaquake characters, casting yet another shadow of skepticism on the entire digital asset industry. It is amazing how brazen these individuals are. Based on their apparent actions, and whether or not they get caught by law enforcement officials, they have effectively destroyed any future professional career in any industry.”

david streltsoff-seaquakeDespite all of the shenanigans, David Streltsoff, a Senior Vice President for San Francisco broker-dealer “US Capital Global” and a former salesman for high-frequency trading firms was apparently not deterred from associating himself with Seaquake. According to his LinkedIn profile in the months of September through November 2019, Streltsoff served as “Business Development Executive” for the company, while also a registered broker-dealer for US Capital. Streltsoff’s rofile was updated at the end of November after Streltsoff was served with a federal court subpoena for information pertaining to his involvement with Seaquake. According to a former investigative journalist, now a due diligence advisor to fund managers evaluating crypto startups, Streltsoff told him “It took one too many days for me to figure out this company was peddling nothing more than vaporware, and the scam accusations against them were eye-opening, so I terminated my association with them.” Jeffrey Sweeney, the CEO of US Capital Global has not replied to inquiries.

Update: Since the litigation was filed, at least one other investor has been identified as having been scammed. That investor was apparently introduced to the company in June 2019 by a friend who was employed by Seaquake.io as “business development executive.” That friend sent the investor a so-called Safe Agreement, along with wire payment instructions to a Seaquake bank account held by a Bank of America branch in Colorado. Once that investor learned of the recent court action, the investor contacted Katz and demanded the return of the money sent to Seaquake in July. Katz replied via email stating “we have no record of having executed a Safe Agreement with you, and the former employee provided you with incorrect wire instructions, so we never received your money, and we don’t owe you anything.” When the investor provided Katz and Krueger with Bank of America correspondence that affirmed the Seaquake account information was correct and confirmation from the bank the wire payment had in fact been credited to the account Katz created, Katz ceased all further communication. That investor has since filed a criminal complaint and the former executive is said to be cooperating with law enforcement authorities. Perhaps Mr. William Bao Bean, a principal of SOSV Ventures / Chinaccelerator –which recently disclosed making an investment in “Seaquakes”, as did Jeremy Colless, Managing Partner of down-under VC “Artesian Capital” both failed to get the memo…(?)

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE

In November, the federal court judge lifted the temporary restraining order on bank accounts controlled by Seaquake principals Katz and Krueger, and cited concerns as to whether the Florida court was the appropriate jurisdiction to litigate the action. Plaintiffs are expected to continue the litigation.

Katz was last seen in December at the Hotel Kai Tulum resort in Cabo San Lucas vacationing with his wife, who posted an assortment of photos baring ‘birthday bling’ while sipping margaritas.

THIS STORY UPDATED SEPTEMBER 2020 TO MARK THE FIRST ANNIVERSARY OF THIS EXCLUSIVE REPORT. CLICK HERE FOR THE UPDATE