Colorado’s securities commissioner has sued a Lakewood, Colo.-based radiologist, alleging he raised about $5.2 million from 14 investors for a company that claimed to use AI to trade stocks but lost money throughout its existence and operated as a Ponzi-like scheme, according to a complaint filed Nov. 4 in Denver District Court.
Michael Cole, MD, and his company, Sage Income, issued promissory notes to investors from November 2019 through January 2024, promising returns of 9% to 15%, according to the complaint. Dr. Cole allegedly told investors that Sage’s algorithm detected and front-ran large institutional trades and had generated two to six times the returns of major stock indexes. In reality, the complaint alleges, Sage had negative returns from November 2019 through December 2024. Investor funds were allegedly used to pay interest to earlier investors and to repay an unrelated loan, and about $190,000 was transferred to Dr. Cole’s personal account.
Sage sent investors quarterly reports claiming their investments had far outperformed the S&P 500, in one case “by approximately 29.4%,” according to the complaint. Every investor lost money, with losses ranging from $35,000 to more than $2 million. Investors included Dr. Cole’s parents and brother, as well as a radiologist who had supervised him during his residency and invested his retirement funds. Sage filed for bankruptcy in February 2025.
The complaint alleges violations of the Colorado Securities Act, including fraud and acting as an unlicensed broker-dealer and investment adviser. It seeks injunctive relief, restitution, damages and a constructive trust on the defendants’ accounts. The allegations have not been proven in court.
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