The U.S. Securities and Exchange Commission (SEC) filed an “emergency action” against former NS8 Inc. Chief Executive Officer Adam Rogas, pursuing an asset freeze and charging him with “defrauding investors” by allegedly untruthfully claiming millions in sales, according to a Thursday (Sept. 17) statement.
NS8 Inc., which is based in Nevada, purportedly provides online retailers with fraud detection and prevention technology, according to the statement.
“As alleged in our complaint, Rogas falsely presented NS8 as a successful business by fabricating revenue figures and providing them to investors,” SEC Denver Regional Office Director Kurt L. Gottschall said in a statement. “Investors are entitled to accurate information about a company’s financial condition, and the SEC is committed to holding accountable corporate executives who deceive investors.”
Rogas allegedly changed the company’s bank statements from at least 2018 up to June of this year to indicate millions in client payments. He allegedly provided the company’s finance department with the purportedly falsified bank statements and sales numbers monthly. The department utilized the bank statements to prepare the financial statements for the company.
Rogas and NS8 allegedly gave investors and potential investors the untrue financial statements in two securities offerings at a minimum.
The SEC claims that NS8 landed roughly $123 million last year and this year, while Rogas allegedly took a minimum of $17.5 million of investor money because of his alleged deception. Its complaint charges Rogas with going against the anti-fraud parts of federal securities regulations.
“The SEC seeks injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest and financial penalties,” the agency said in the statement.
The news comes after it was reported that NS8 commenced layoffs after the sudden resignation of its chief executive. Rogas resigned on Sept. 1 “with immediate effect,” per the the vice president of communications of the firm, James Holborown.
It was also previously reported that the startup’s 225-person labor force would be reduced.
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