Small Investors Beware

When investors only lose around $1.1 million, and the person perpetrating the fraud is enriched $400,000, the story generally won’t make headlines. We’re not sure what dollar amount is significant to the news media, but the Sneed case is illustrative of how ordinary investors get scammed.

Digital Asset Mining Pools

Clifton Curtis Sneed, aka Kaison Sneed, is being sued by the SEC in North Texas. Sneed established a company, The Trade Group (TTG), in which people paid an up-front, non-refundable fee of $5,000 to $20,000 to become a member, receive investment advice, and invest. After receiving the fee, Sneed recommended investments such as digital asset mining pools (DAMP), sometimes telling investors their returns were guaranteed. At the same time, Sneed discouraged traditional investments like stocks and bonds.

Investment Scam Format

Sneed’s investment scam was designed to steal money from smaller investors, often targeting Christians. In Sneed’s e-book, he spoke directly to Christian investors: “The lord called on me to bless others with this knowledge and opportunity to allow them to also live a stress-free life. So TTG was created to give Christians an opportunity to live a wealthy and prosperous life. . . In addition to providing exclusive investment-related advice, . . . [s]ervices include: protecting and growing assets in the present, providing specialized financing solution [sic], creating off-shore accounts for planning retirement and passing wealth on to future generations.”

Investment Fraud Tactics

Sneed’s tactics while not new, are important reminders of the lies people will tell to get your investment dollars.

  • Certifications. Sneed claimed he was a certified financial planner, a certified senior advisor, and a certified asset protection specialist, none of which was true.
  • Number of clients. While Sneed worked from his home with never more than 100 clients, his marketing materials touted, “TTG was one of the largest investment firms in the world, had 30,000 private members, 550,000 account holders, and received thousands of requests weekly for investments.”
  • Exclusivity. Sneed claimed investment opportunities through TTG were exclusive, i.e. no other way to invest but through TTG. Sneed claimed TTG was the “world’s number 1 trading provider,” filling over 150 million orders in 173 countries with billions of deposits.
  • Exaggerated returns. During the first DAMP, Sneed told prospects they would receive 25 to 60% monthly returns (guaranteed and insured). During the second DAMP. Sneed told prospects to expect 400% annual returns guaranteed.
  • Referral fees. Sneed received referral commissions by directing his clients to make certain investments but never disclosed those referral commissions to his clients. Sneed was making 30% on the first DAMP investment and 10% on the second DAMP investment. SEC v. Sneed Complaint

Prior Criminal Activity

Sneed was no stranger to the law, long before he started the TTG investment fraud scheme. In 2007 Sneed pled guilty in Utah to felony securities fraud. In 2006 the SEC filed a civil complaint in Texas against Sneed and his business, Unlimited Cash. In 2008 the SEC barred Sneed from associating with any broker, dealer, or investment advisor. For the TTG scheme, Alabama and Georgia have also issued Cease and Desist orders.

With so many new investment options, and working with people remotely, it’s easier than ever to be roped into fraudulent investment schemes.

Investor diligence with Sneed would have revealed past criminal activity.

Whether you are exploring financial securities, oil and gas investments, digital assets, and crypto-currency, do your research. Take time to determine if your salesperson and the securities offering are registered with the state or SEC. Check the criminal history of the people in the deal, as well as any past or pending lawsuits.

We hope all your digital assets, crypto-currency, and oil & gas investments are safe and profitable. But if you find yourself searching for an experienced oil and gas litigation lawyer or a commercial litigation lawyer, we are here to help.