The Securities and Exchange Commission charged the founder of a fintech startup with a scheme to defraud investors and misappropriate funds for his own use.
The SEC charged Michael Liberty, the founder of the fintech startup now known as Mozido Inc., with tricking hundreds of investors into believing that they were funding fast-growing startup companies.
However, they were not.
According to the SEC, Liberty and his accomplices lied to those investors about the financial prospects of the startups, the use of their investment dollars, Liberty’s involvement with the startups, and the nature of the investments offered.
Through their scheme, Liberty and his accomplices raised more than $55 million from hundreds of investors, misappropriating most of it to fund Liberty’s lifestyle, including chartered flights, a dairy farm and the funding of a movie production, according to the SEC’s complaint.
“As alleged in our complaint, these investments were sold as a chance to get in early with a seemingly promising fintech company,” said Paul Levenson, director of the SEC’s Boston regional office, said in a statement. “The prospect of investing in a nonpublic startup company may hold considerable allure, but buyers need to understand what they are buying. Unscrupulous operators make it difficult for ordinary investors to assess such ‘investment opportunities.’”