SEC charges founder of AI start-up Centricity with defrauding investors – FX News Group

author
1 minute, 12 seconds Read

The Securities and Exchange Commission (SEC) has filed charges against Michael Brackett, the founder and CEO of purported artificial intelligence start-up Centricity, Inc., for allegedly engaging in a multimillion-dollar offering fraud.

According to the SEC’s complaint, from 2019 through 2021, Brackett raised $2.8 million from seven investors by making fraudulent misrepresentations about Centricity’s customers and revenue as well as Brackett’s own educational and employment background.

The complaint alleges that Brackett repeatedly told prospective investors that Centricity had contracts with several large national companies and that Centricity’s revenue was several million dollars while soliciting their investments. In fact, as alleged in the complaint, there is no evidence that Centricity or Brackett had any contact with most of the companies Brackett asserted were Centricity’s customers, let alone contracts with them.

The complaint also alleges that Centricity had no revenue in 2020 and less than $60,000 in revenue in 2021. The complaint further alleges that Brackett misappropriated more than $250,000 from Centricity to directly fund his personal expenses, including a luxury apartment, a Tesla, gym memberships, and personal debt.

The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, charges Brackett with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder.

The SEC seeks a permanent injunction, disgorgement with prejudgment interest, civil penalties and an officer and director bar against Brackett.

This post was originally published on this site

Similar Posts