The U.S. Securities and Exchange Commission (SEC) has charged Matthew Melton with fraud, making material misrepresentations to investors about the performance of its Price Physics trading algorithm, and misappropriating more than $1.5 million in investor earnings.。

According to the SEC's complaint filed with the U.S. District Court for the Southern District of New York, between April 1, 2018 and October 31, 2020, Melton raised more than $3.4 million from at least 23 outdoor-friendly investors in Puerto Rico and elsewhere.。

Melton allegedly claimed that by using his "Price Physics" trading algorithm, he could profit from stock index futures trading.。

Contrary to those claims, Melton's deal was always unprofitable, the complaint said.。

The complaint alleges that in order to invest in Melton, the investor signed a loan agreement or promissory note and wired the funds directly into Melton's personal bank account, which was mixed with other investors' funds.。

As alleged in the complaint, Melton did not use the investor's funds as promised, but instead diverted more than $1.5 million of investor funds to make Ponzi scheme-style payments to other investors, as well as to cover personal expenses such as travel, sailing and mortgage payments.。

In its indictment, the SEC alleges that Melton violated federal securities laws and seeks permanent injunctive relief, conduct-based injunctions, fines and prepaid interest, civil penalties, and a ban on serving as an executive and director.。

In a parallel lawsuit, the U.S. Attorney's Office for the Southern District of New York announced criminal charges against Melton.。