The U.S. Securities and Exchange Commission (SEC) has filed charges against Paul A. Pereira, the former CEO and co-founder of Alfi, for allegedly disseminating materially false and misleading information on social media. According to the SEC complaint, the aim was to artificially inflate the stock price of the now-bankrupt advertising technology company based in Florida.
The legal action stems from a series of incidents following Alfi‘s initial public offering in May 2021. Under the alias “Uptix12,” Pereira is accused of claiming on social media platforms that Alfi was already securing between $10 million to $20 million in revenue. This assertion starkly contrasted with the reality that the company was on track to report a mere $17,450 in revenue at the time. Furthermore, Pereira allegedly misrepresented in a YouTube interview that Alfi was negotiating a contract to deploy its technology across the outlets of a well-known restaurant chain, a contract that, according to the SEC’s complaint, was never under discussion.
The SEC’s filing also highlights an incident on August 17, 2021, where Pereira purportedly sought to rally Alfi‘s dwindling stock price with unfounded claims about the company’s advertising inventory. He stated that Alfi‘s available advertising inventory was expected to exceed $100 million by the end of 2021 despite the company having less than $5 million in inventory and no substantial basis for such projections. These actions preceded Alfi‘s bankruptcy filing in October 2022.
The SEC is pursuing a permanent injunction, an officer-and-director ban, and a financial penalty against Pereira as part of its litigation. This case not only spotlights the SEC’s vigilant oversight of corporate governance and investor protection but also serves as a cautionary tale for executives regarding the ramifications of misleading financial communications.
