While Bitwise Industries co-founders and former co-CEOs Jake Soberal and Irma Olguin, Jr. have pleaded not guilty to a hefty complaint of wire fraud conspiracy, the two have already managed to quell some Federal heat.
The duo have agreed to a judgment amid an action initiated by the the U.S. Securities and Exchange Commission, a speedy resolution to charges that they misled investors during a key fundraising round.
The big picture: Along with the criminal filing from the federal government, the SEC charged Soberal and Olguin last week with misleading investors about Bitwise’s finances relating to $70 million raised from investors last year.
- The SEC alleges that Soberal and Olguin created falsified bank records and a fake audit report which they showed to investors. Those records showed inflated cash balances and higher revenues than the company actually had.
- Soberal and Olguin have agreed to the entry of a partial judgment, striking a deal that would impose permanent and conduct-based injunctions and keep them from holding officer and director positions in the future.
- Per the deal, they also face disgorgement, prejudgement interest and further civil penalties.
- Further, there are signs of a deal with federal authorities regarding the criminal complaint, per the affidavit filed last week. Soberal and Olguin admitted in their interviews with federal authorities that they conspired to lie to board members, investors, lenders and others about Bitwise’s finances to obtain investments.
Read the SEC complaint:
What’s next: Soberal and Olguin are scheduled to appear in court on Dec. 8 for a status hearing for the posting of their bonds.
- Soberal put his family’s house as his bond, while Olguin put her mother’s house as her bond. The hearing will determine the value of both properties.
- They will also return to court on Jan. 25 of next year for a preliminary hearing in their criminal case.