Cyberfraud prevention firm's CEO charged with conning investors
NS8 Inc.'s former leader, Adam Rogas, was arrested on Thursday
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The founder and former CEO of a cyberfraud prevention company has been charged with swindling investors out of tens of millions of dollars.
NS8 Inc.'s former leader, Adam Rogas, was arrested on Thursday. Federal authorities say he used fraudulent financial data to obtain more than $123 million in financing for the company in a scheme in which he personally gained $17.5 million.
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Rogas was a co-founder of the Vegas-based company, which developed and sold electronic tools to help online vendors assess the fraud risks of customer transactions. He also served as its CEO, CFO and a member of its board and was "primarily responsible" for the company’s fundraising activities, court documents show.
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Rogas is accused of altering bank statements to show millions of dollars in payments from customers that didn't actually exist from at least 2018 through June 2020, according to a complaint from the Securities and Exchange Commission.
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Every month, Rogas sent the bogus records to NS8's finance department, where they were used to prepare the company's financial statements, according to the complaint.
From January 2019 through February 2020, between 40% and 95% of the purported total assets on NS8’s balance sheet were falsified, according to documents filed in U.S. District Court in Manhattan.
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In at least two securities offerings, the SEC says NS8 and Rogas provided the statements with bogus data to both investors as well as prospective stockholders, who collectively poured millions into the company.
"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," said Kurt Gottschall, director of the SEC's Denver Regional Office.
Rogas is facing one count of securities fraud, one count of fraud in the offer or sale of securities, and one count of wire fraud.