On Tuesday, the Securities and Exchange Commission announced it had charge Paul A. Pereira, former CEO and co-founder of Alfi, Inc., with fraud stemming from false claims on social media.
According to the SEC, Pereira made the misleading statements on social media about the company’s financial and performance metrics in an effort to boost the company’s stock price. The agency said while Pereira was serving as the CEO of Alfi, a Florida-based advertising technology company, he posted that he “wouldn’t doubt” the company had “$10 mm to $20 mm in revenues already in their back pocket,” when, in reality, the company was set to report only $17,450 in revenues.
Not long after, the agency said, Pereira announced in a YouTube interview that Alfi was entering into a contract with the founder of a successful restaurant chain to deploy Alfi technology in his restaurants. In reality, the restaurant chain’s founder had never discussed such a contract with Pereira or any other Alfi personnel.
Later, when Alfi’s stock price was at its lowest level in nearly two months, on August 17, 2021, Pereira made more false and misleading statements on social media and in company-issued press releases about the company’s advertising inventory, include that “available advertising inventory by the end of 2021 is expected to be in excess of $100 million.” At the time, the company had less than $5 million in advertising inventory, and Pereira did not have a reasonable basis to believe his company would achieve $100 million in inventory by the end of 2021. The company filed for bankruptcy in October 2022.
“As alleged in our complaint, Pereira tried to boost the company’s stock price through his false and misleading statements,” Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said. “This case further demonstrates the SEC’s commitment to holding officers of public companies accountable when they violate their legal obligation of candor and fair and full disclosure to investors.”
The complaint, filed in the U.S. District Court for the Southern District of Florida, charges Pereira with violating antifraud provisions of federal securities law and seeks a permanent injunction, as well as a civil penalty and a provision barring Pereira from serving as an officer or director of another company.