SEC Holds Florida Company Liable for Securities Law Violations (Misrepresentation of Technology in Statements to Investors)
On October 15th, 2024, the Securities and Exchange Commission (SEC) announced that a Florida company is being held liable for securities law violations for making material misrepresentations to investors. Destiny Robotics Corp—a Miami-based artificial intelligence (AI) start-up—and its owner Megi Kavtaradze allegedly raised more than $140,000 from investors on fraudulent grounds. Here, our Miami securities fraud lawyer discusses the settlement in more detail.
SEC Complaint and Settlement: Miami-Based Start-Up Company
The SEC filed a complaint against the Miami-based startup and its owner Megi Kavtaradze in the United States Court for the Southern District of Florida (Destiny Robotics Corp., et al.). According to allegations raised by the SEC, Mr. Kavtaradze—the founder and chief executive officer (CEO) of Destiny Robotics Corp—made materially misleading statements to actual and prospective investors. Specifically, the CEO misrepresented the company’s operations and its products.
Between February of 2022 and March of 2023, the company reportedly took in more than $140,000 from investors based on the claim that it was developing an innovative AI-based at-home robot assistant to be produced and sold in 2023. However, the SEC reports that the company’s actual product was both far less advanced and far behind that timeframe in production. The defendants entered into a settlement with the SEC and agreed to pay disgorgement and a civil financial penalty.
Companies that Raise Funds through Misrepresentation Breach Securities Law
Securities laws are designed to protect investors. Among other things, they require companies that sell securities to comply with certain standards that help to ensure transparency (and honesty) in U.S. financial markets. When a company raises funds from the public, it is required to provide accurate and complete information about its operations, financial status, and risks associated with the investment. Misrepresenting any of these aspects constitutes a breach of securities law. Key securities regulations include:
- The Securities Act of 1933
- The Securities Exchange Act of 1934
- Securities Rule 10b-5
Investors Can Hold Companies Liable for Fraudulent Securities Offerings
Do you invest money in a private start-up company? You may be protected under state and federal securities laws. Investors who have been misled by fraudulent securities offerings have the right to seek recourse. You may have a civil claim against the responsible party—potentially including leadership and the company and financial advisors. No matter your specific circumstances, a top-tier Florida investment fraud lawyer can review your case, investigate the matter, answer legal questions, and help you develop a strategy to take action to address your investment losses. You may be entitled to recover compensation. A proactive approach is a must.
Consult With Our Florida Securities Fraud Lawyer Today
At Carlson & Associates, P.A., our Florida securities fraud attorneys put investors first. If you or a loved one suffered serious investment losses, we are here to help. To set up a completely confidential consultation with a Florida investment fraud lawyer, please do not hesitate to contact us today. We represent investors throughout all of South Florida.
Source:
sec.gov/enforcement-litigation/litigation-releases/lr-26157