The U.S. Securities and Exchange Commission (SEC) has charged Abraham Shafi, the founder and former CEO of the social media startup Get Together Inc. d/b/a IRL, with defrauding investors by providing false and misleading information about the company’s growth and concealing personal use of company funds. Shafi allegedly raised $170 million from investors, presenting IRL as a fast-growing social media platform.
Allegations of Fraudulent Activity
According to the SEC’s complaint, Shafi raised approximately $170 million from investors by presenting IRL as a rapidly growing social media platform with an organic user base of 12 million. In reality, the company spent millions on advertisements offering incentives to download the app. Shafi reportedly masked these marketing expenses through understated offering documents and by routing payments through third parties.
Furthermore, Shafi is accused of failing to disclose that he and his fiancée, Barbara Woortmann, used IRL‘s business credit cards to cover personal expenses, including clothing, home furnishings, and travel, amounting to hundreds of thousands of dollars.
Regulatory Response
The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, charges Shafi with violating the antifraud provisions of federal securities laws. The SEC seeks permanent injunctive relief, civil money penalties, disgorgement with prejudgment interest, and a bar against Shafi serving as an officer or director of a public company. Woortmann is named as a relief defendant, with the SEC seeking disgorgement of the personal expenses she charged to the IRL credit card, paid with investor funds.
