SEC Files Lawsuit Against Geosyn Mining for Investor Fraud

In a significant legal development, the U.S. Securities and Exchange Commission (SEC) has launched a lawsuit against Geosyn Mining and its co-founders, accusing them of duping investors through fraudulent activities. The lawsuit, filed on April 24 in a federal court in Fort Worth, Texas, alleges that Geosyn and its executives, CEO Caleb Joseph Ward and former COO Jeremy George McNutt, engaged in deceitful practices resulting in investor losses amounting to $5.6 million.

According to the SEC, Geosyn misled approximately 64 investors by peddling service agreements as securities between November 2021 and December 2022. The complaint asserts that Geosyn falsely represented its contracts with electricity providers, inflating the costs by up to 40-50% above the rates communicated to customers.

Furthermore, the SEC contends that Ward and McNutt misled investors regarding Geosyn’s operations. Despite committing to acquiring 1,400 mining rigs, the company failed to procure 400 units and neglected to activate most of the purchased mining machines. The SEC alleges that Geosyn issued Bitcoin payouts to investors to maintain the illusion of operational profitability.

Personal Misuse of Funds

The lawsuit also accuses Ward and McNutt of misappropriating approximately $1.2 million in investor funds for personal indulgence. These expenditures include Ward’s extravagant $20,000 “Las Vegas nightclub wedding celebration” and a $49,000 Disney World vacation.

In a desperate attempt to salvage the situation, Ward resorted to issuing “IOU” notes to investors to document their owed Bitcoin. Despite announcing plans for bankruptcy in June, Geosyn never followed through with the filing, according to the SEC.

The SEC seeks a permanent injunction against Geosyn Mining and its co-founders, along with the restitution of misappropriated funds and the imposition of penalties. This legal action underscores the SEC’s commitment to protecting investors and holding accountable those who engage in fraudulent activities.