The Securities and Exchange Commission (SEC) filed fraud charges against Renwick Haddow, the founder of Bitcoin Stores Inc and Bar Works Inc, alleging that he bilked investors in both companies while hiding his connection given his checkered past with regulators in the U.K.
Renwick Haddow, a British citizen living in New York, allegedly set up an unregistered broker-dealer firm to sell securities in Bitcoin Store Inc and Bar Works Inc, the SEC said in a statement.
“As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability. In reality, Haddow controlled the companies from behind the scenes and they were far from profitable,” said Andrew Calamari, Director of the SEC’s New York Regional Office.
Investors were told that Bitcoin Store Inc. had generated several million dollars in gross sales in 2015, while the bank accounts of the company received less than $250,000 in incoming transfers.
The SEC’s complaint filed in federal district court in Manhattan charges Haddow, Bitcoin Store, Bar Works, and another Haddow-controlled company called Bar Works 7th Avenue, Inc. with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
Haddow allegedly diverted funds raised by the broker-dealer for the Bitcoin Store, and sent more than $4 million from the Bar Works bank accounts to one or more accounts in Mauritius and $1 million to one or more accounts in Morocco, the statement said.