The Securities Exchange Commission (SEC) filed a civil complaint against defendant Adam P. Rogas, the founder and former CEO of NS8 FP, Inc. (NS8). on Monday. NS8 is reportedly a technology company founded in 2016 that sells fraud detection and prevention software to e-commerce merchants. The filing charges Rogas with falsifying bank records and financial statements to induce investors to fund his company’s two securities offerings. According to the Southern District of New York complaint, through Rogas’s “brazen [and] deceptive” conduct, he pocketed approximately $17.5 million of investor money.
The filing states that Rogas is a Las Vegas, Nevada resident and co-founder and the former CEO of The complaint also names three relief defendant companies allegedly controlled by Rogas and through which Rogas shielded assets. They include NS8 FP, LLC, which, in June 2020, received over $7.5 million in an equity redemption of NS8, Inc. shares, 2020 MVP, LLC to which Rogas transferred the deed to his Las Vegas residence in July, and Rogassi Enterprises, LLC through which Rogas holds title to at least two automobiles, the SEC contends.
The complaint claims that no later than 2018, Rogas “downloaded electronic copies of the Revenue Account statements and altered the text of those statements to grossly exaggerate the dollars paid by customers to NS8 and, in at least some instances, to alter the name of the payor.” Allegedly, Rogas’s modifications falsely showed that the company had earned millions of dollars in revenue that in fact it had not come close to attaining. For example, in June 2020, Rogas’s fraud gave the impression that NS8 had over $62 million in its revenue account, when in reality, it had just over $28,000.
The falsified bank statements were reportedly provided to NS8’s finance department, which relied on them in preparing the company’s financial statements, and which were presented to extant and prospective investors. On the basis of NS8’s robust financials, investors contributed over $123 million to fund the 2019 and 2020 securities offerings.
The SEC claims that “Rogas went to great lengths to conceal his deceptive conduct,” by ensuring that he alone could access the customer-deposited funds bank account, and even after being questioned about certain inconsistencies by a consultant retained by potential investors, added “more phony transactions to NS8’s already falsified bank statement in an effort to prevent his fraud from being discovered.” According to the filing, an NS8 financial department employee uncovered the company’s true balance of funds and underlying falsified transactions in August. Rogas subsequently resigned on Sept. 1.
The SEC’s civil filing charges Rogas with two counts of securities violations and equitable disgorgement. Among other requests, the agency seeks a permanent injunction against Rogas, disgorgement of his and the relief defendants’ ill-gotten gains, and the assessment of third-tier civil penalties pursuant to federal securities laws.
