Private technology services startup Bitwise Industries Inc.The former CEO was accused by the Securities and Exchange Commission (SEC) of falsifying financial documents when raising about $70 million from investors in 2022.。

To Jake Soberal and Irma Olguin, Jr..The allegations reveal a deceptive conspiracy that eventually led to the company's collapse.。The two former CEOs are accused of making material misrepresentations about Bitwise's financial health and fabricating financial documents to mislead investors.。

Bitwise accused of fraud

The documents included falsified bank records and falsified audit reports, portraying Bitwise as a thriving, financially sound company.。In fact, Bitwise is facing a cash shortage that makes it difficult to maintain operations.。

Monique Winkler, regional director of the SEC's San Francisco Regional Office, said: "We accuse Soberal and Olguin of blatant fraud, including the production of false financial documents, in order to defraud investors and raise funds."。

At one point, the defendants conspired to send investors a screenshot of an alleged corporate bank account showing a cash balance of $23.4 million.。In fact, the account is only $325,100。It wasn't a bank error, it was fraud, and the SEC is moving to hold the defendants accountable。"

The consequences of the scam became apparent in May 2023, when Bitwise was unable to meet its payroll obligations and was forced to fire all 900 of its employees in May, according to the SEC.。

Soberal and Olguin have reached an agreement with the SEC, but court approval is required, according to a statement from the regulator.。In a separate legal action, the U.S. Attorney's Office for the Eastern District of California also filed criminal charges against Soberal and Olguin for their alleged fraudulent activities.。

The Death of Bitwise

Bitwise's disintegration leaves many unanswered questions。What led to the sudden demise of the company？Unlike so many tech companies facing layoffs during tough times, Bitwise's problems are clearly deeper than a simple recession, the Los Angeles Times reported.。

The decline of the company is accompanied by special financial management decisions.。Payroll transition from direct deposits to paper checks causes confusion and anxiety - payrolls start jumping and 401 (k) contributions go missing。

Landlord drives Bitwise out of Fresno due to rent arrears, situation continues to deteriorate。Olguin and Soberal remain silent despite growing crisis。Meanwhile, former employees filed a class-action lawsuit against Bitwise, accusing it of violating labor laws and stealing wages.。