- The SEC settled fraud charges with Ideanomics over misleading financial reports and crypto revenue from 2017 to 2019.
- Ideanomics falsely reported over $40 million in 2019 revenue, leading to inflated financial statements.
- Former CEO Zheng Wu will pay $3.3 million in penalties and face a 10-year ban from public company roles.
The United States Securities and Exchange Commission (SEC) has concluded a settlement with electric vehicle company Ideanomics over charges related to misleading financial reporting.
The SEC’s investigation revealed that between 2017 and 2019, Ideanomics and several senior executives provided inaccurate information about the company’s financial performance, particularly concerning revenue from crypto assets.
Misleading Revenue Reports
The Securities and Exchange Commission (SEC) has stated that Ideanomics incorrectly reported revenue of more than $40 million in 2019 due to a false accounting connected with a crypto asset transaction.
Last year’s financial statements were inflated because of this deception which made the company appear healthier financially than it was in reality, thereby deceiving both shareholders and the general public.
The SEC’s investigation implicated Ideanomics’ former chairman and CEO, Zheng Wu, current CEO Alfred Poor, and former CFO Federico Tovar in multiple fraudulent activities. These included issuing false revenue guidance, providing auditors with fraudulent documents, and concealing Wu’s interests in companies conducting business with Ideanomics.
Settlement and Penalties
None of the parties admitted or denied the SEC’s findings as part of their settlement. Zheng Wu will disgorge over $3.3 million and pay penalties, in addition to being barred from serving as a public company director or manager for 10 years.
Tovar and Poor must each pay $75,000 in fines; additionally, Tovar cannot practice as an accountant for two years. Ideanomics is subject to a $1.4 million penalty and will hire an independent compliance consultant to strengthen its internal controls over financial reporting.
Other Legal News
This agreement with Ideanomics coincides with the Supreme Court reviewing an appeal related to Nvidia’s alleged securities frauds during cryptocurrency mining revenue disclosures made between 2017-2018 where false information had been provided about such figures just like what happened here again too.
In settling charges brought against it by U.S authorities last year when they paid $5.5m without admitting liability for those allegations either
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