The U.S. Securities and Exchange Commission sued Texas resident Nathan Fuller on May 30, 2026, at approximately 5:27 p.m. UTC, alleging he defrauded roughly 150 investors out of $12.3 million using a fiction: proprietary AI-powered trading bots that never existed.
The complaint, filed in the U.S. District Court for the Southern District of Texas, says Fuller sold passive joint-venture interests in a purported crypto arbitrage operation through Privvy Investments LLC and its assumed business names, Privvy Investments and Gateway Digital Investments. From at least October 2022 through mid-2024, he told investors his bots could scan markets, execute high-frequency arbitrage trades, and cap losses through stop-loss coding. Promised returns ran from 40–50% within 30 to 45 days, and in some cases exceeded 100% in under a month.
None of it was real.
The actual numbers
Of the $12.3 million raised, the SEC says only about $380,000 — roughly 3% — ever reached crypto markets. No bots were involved in those trades. They generated no profits.
Fuller allegedly moved the rest elsewhere. According to the complaint, at least $6.2 million went to personal expenses: a home purchase, gambling, travel, and vehicles. Another $5.5 million went to Ponzi-like payments to existing investors — the industry-standard move for keeping a fraud afloat while new money slows.
The AI irony
As investor withdrawal demands mounted, Fuller turned to the same technology he'd been faking all along. The SEC says he used AI to generate a letter from a fictitious auditing firm, telling investors their accounts were under review and would eventually be liquidated into a trust. He also fabricated account statements showing gains and invented the entities behind them.
The scheme's core lie was that AI bots were generating returns. The scheme's cover-up used real AI to forge the paperwork. That reversal — fake AI as the product, real AI as the cover — is the sharpest detail in the complaint and the one likely to drive attention.
Relief sought
The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains, civil monetary penalties, and a ban on Fuller participating in any future securities offerings.
The DOJ layer
This SEC case is not Fuller's first legal reckoning with Privvy. A separate bankruptcy proceeding ended with the Justice Department reporting that Fuller was denied discharge of more than $12.5 million in debt after admitting he had operated Privvy as a Ponzi scheme and fabricated documentation. The SEC civil complaint filed today layers on top of that outcome, adding securities fraud charges to what was already a court-acknowledged fraud.
The combination — bankruptcy admission, DOJ involvement, and now an SEC enforcement action — closes most of the exits.
Primary source: SEC litigation release LR-26558, cited in the CoinDesk report published May 30, 2026. The SEC.gov endpoint returned a rate-limit block on direct access; all figures and characterizations are drawn from the CoinDesk article, which links directly to and quotes from the official complaint.