The Securities and Exchange Commission announced that it has charged a Canadian man and three companies he controls with orchestrating a series of fraudulent securities offerings that raised more than $18 million from investors in the United States and abroad.
The SEC filed its complaint against Nathan Gauvin and the three entities, Blackridge, LLC, Gray Digital Capital Management USA, LLC, and Gray Digital Technologies, LLC. Gauvin was accused of misappropriating about $6.3 million of investor funds and using fabricated credentials, false performance metrics, and fictitious account statements to lure investors into his schemes. In a parallel action, Gauvin was charged in a 21-count indictment in federal court with conspiracy to commit securities fraud and wire fraud, securities fraud, wire fraud, investment advisor fraud, bank fraud, money laundering, obstruction of justice and aggravated identity theft.
In a complaint filed in the U.S. District Court for the Eastern District of New York, the SEC said that Gauvin gained a following on Discord by falsely presenting himself as a successful investment professional managing over a billion dollars in assets through Blackridge, which was actually a shell entity.
“From September 2022 to November 2024, Gauvin and his entities allegedly raised approximately $18.1 million from investors through an unregistered offering of interests in the “Gray Fund,” a purported diversified investment fund advised by Gray Digital and Gauvin,” the SEC stated. “The complaint alleges that Gauvin and Gray Digital falsely claimed that the Gray Fund generated double-digit monthly returns and held over $78 million in assets, when, in fact, the fund actually had a monthly compounded return of approximately 1.4% and its assets were far lower than claimed.”
Gauvin allegedly used the investor funds to finance a lavish lifestyle, including using hundreds of thousands of dollars for purchases of custom jewelry, luxury concierge services, real estate, and art.
Gauvin was also charged in another scheme in which he allegedly offered “seed stock” in Gray Digital Technologies at $30,000 per share, falsely claiming the company had a $60 million valuation and more than $12 million in annual revenue. But the investigation determined that Gray Digital Technologies had no operations, assets, or revenue. Gauvin allegedly raised at least $60,000 from two retail investors and then stopped communicating with them about this offering.
“Gauvin exploited the trust of his online followers to perpetrate a brazen fraud,” said Jaime Marinaro, Associate Director of the SEC’s Fort Worth Regional Office. “Investors should always verify the credentials of anyone offering investment opportunities, especially when those opportunities are promoted through social media or online communities.”
Gauvin and his three entities are charged with violating the antifraud provisions of the federal securities laws and Gauvin, Gray Digital, and Gray Digital Technologies are charged with registration violations. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and conduct-based injunctions against all defendants, along with a bar against Gauvin acting as an investment adviser.
Gauvin was arrested Dec. 10 in England on the criminal charges, on a provisional arrest warrant issued from the Eastern District of New York. “As alleged, the defendant’s investment company was a house of cards constructed with investor funds and held together with lies,” stated United States Attorney Joseph Nocella, Jr.. “When his house of cards collapsed, Gauvin doubled down by obstructing the regulator’s investigation and trying to defraud a lender.”
The attorneys at Hyman Cotter PC include former senior attorneys at the SEC whose legal experience and industry knowledge make them uniquely qualified to provide counsel on securities regulatory, compliance and enforcement matters. Our attorneys fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. If your firm is facing an investigation from a regulatory agency, please contact Hyman Cotter PC at 312-291-4600 or through our online contact form.
