Nathan Fuller, a resident of Cypress, Texas and the owner of Privvy Investments LLC, has been charged by the Securities and Exchange Commission with running a $12.3M crypto asset fraud scheme in which he raised money from approximately 150 investors based on a series of fabricated claims: that he possessed proprietary AI-based trading bots capable of generating guaranteed returns of more than 100% within 21 days, that investor funds were secured by a surety bond, insured by the FDIC, and protected by professional liability insurance. The SEC’s complaint, filed in the U.S. District Court for the Southern District of Texas on May 28, 2026, alleges that Fuller operated the scheme from at least October 2022 through mid-2024 under both the Privvy Investments name and an assumed business name, Gateway Digital Investments.
His bots did not function as represented. Of the $12.3M raised, Fuller misappropriated at least $6.2M for personal expenses including luxury goods, gambling trips, and a nearly $1M home purchased for his ex-wife, while using approximately $5.5M in Ponzi-like payments to sustain the appearance of a functioning investment operation. When investors began to close in, Fuller filed for Chapter 7 bankruptcy in October 2024, and then admitted in court that Privvy had been a Ponzi scheme all along.
AI Trading Bots and Guaranteed Returns Were the Hook for 150 Investors Over Two Years
Fuller operated Privvy Investments as a joint-venture offering, a structure that allowed him to pitch investors on what appeared to be a business partnership rather than a conventional securities offering. He told investors he had developed proprietary AI-based trading bots capable of executing high-frequency arbitrage trades across crypto asset platforms, and that those bots could deliver returns far outside the range of any legitimate investment.
According to the SEC’s complaint, Fuller told some investors their funds would generate returns of more than 40-50% within 30 to 45 days. He told others they could expect guaranteed profits exceeding 100% in as little as 21 days. To support the credibility of those claims, Fuller added a layer of false assurances about the safety of investor funds: a surety bond, FDIC insurance, and professional liability coverage. None of these protections existed. The bots, while real as a concept, did not perform as Fuller described. What Fuller was actually doing with investor money had nothing to do with arbitrage trading.
$6.2M Went to Personal Expenses and $5.5M Was Recycled to Pay Earlier Investors
Of the $12.3M raised, at least $6.2M went directly to Fuller’s personal use. Court records from the subsequent bankruptcy proceeding detail where that money went: luxury goods, gambling trips, and the purchase of a nearly $1M home for his ex-wife, who was involved in the business and with whom Fuller continued to reside after their separation. The remaining approximately $5.5M was used to make Ponzi-like payments to earlier investors, creating the appearance of returns and buying Fuller time to continue soliciting new funds.
To keep investors from asking too many questions, Fuller produced fake account statements showing fictitious portfolio balances and fabricated correspondence from phony entities. Investors reviewing these materials had no way to distinguish them from legitimate documentation. The false statements and fabricated records are central to the securities fraud charges Fuller now faces.
A Bankruptcy Filing in October 2024 Ended With Fuller Admitting the Scheme in Court
As investor lawsuits mounted and a Texas state court appointed a receiver to seize Fuller’s assets, Fuller filed for Chapter 7 bankruptcy in October 2024, listing more than $12.5M in unsecured debts to defrauded investors. The bankruptcy filing did not provide the protection he sought. The U.S. Trustee Program investigated and found that Fuller had concealed assets, falsified bankruptcy documents, and lied under oath. He was held in contempt of court during the proceedings.
Fuller eventually admitted in court that Privvy Investments had operated as a Ponzi scheme and that he had fabricated documents to perpetuate it. He also confessed to giving false testimony and falsifying bankruptcy filings to obstruct the Chapter 7 trustee. On August 1, 2025, the Bankruptcy Court for the Southern District of Texas entered a default judgment against Fuller, leaving him personally liable for the full $12.5M. U.S. Trustee Kevin Epstein stated that “fraudsters seeking to whitewash their schemes will not find sanctuary in bankruptcy.” Creditors and investors may continue pursuing collection against him directly.
The SEC Now Seeks Disgorgement and Civil Penalties Against Fuller in Federal Court
The SEC’s civil complaint, filed May 28, 2026 in the Southern District of Texas, charges Fuller with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The agency seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The investigation was conducted by Carol Stumbaugh and staff in the SEC’s Fort Worth Regional Office, supervised by Timothy McCole and Jaime Marinaro, with assistance from the Division of Enforcement’s Cyber Unit. The litigation will be led by Tyson Lies, supervised by Keefe Bernstein.
Conclusion
Fuller pitched AI bots that didn’t work, promised returns no legitimate fund could deliver, stole $6.2M, sent investors fake account statements, filed for bankruptcy to erase the debts, admitted in court it was a Ponzi scheme throughout, and got charged by the SEC anyway. The fake surety bond, the fabricated FDIC assurances, the phony account statements, and the bankruptcy lies form a longer record of deception than most enforcement targets accumulate in a single case. The 150 investors who wired money to Privvy Investments based on those bot performance claims are what the SEC is now asking a federal court to account for.
