SEC v. Michael Brackett, No. LR-25980, Southern District of New York (Apr. 19, 2024) — Press Release
raw: Michael Brackett
Michael Brackett, No. LR-25980 (S.D.N.Y. Apr. 19, 2024)
summary
The SEC charged Centricity, Inc. founder Michael Brackett for a $2.8 million offering fraud involving misrepresented revenue and contracts, seeking an injunction and permanent bar.
paragraph
Michael Brackett allegedly defrauded seven investors of $2.8 million by misrepresenting Centricity's revenue and customer contracts between 2019 and 2021. The SEC complaint also alleges Brackett misappropriated over $250,000 for personal luxury expenses, including a Tesla and a luxury apartment. Brackett faces charges for violating antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
narrative
The SEC has filed charges against Michael Brackett, the founder and CEO of the AI start-up Centricity, Inc., for orchestrating a multimillion-dollar offering fraud. Between 2019 and 2021, Brackett allegedly raised $2.8 million from seven investors by making fraudulent claims about the company's revenue and its contracts with large national firms. In reality, the company had no revenue in 2020 and less than $60,000 in 2021, while Brackett also falsified his own professional background. Furthermore, the SEC alleges Brackett misappropriated more than $250,000 of investor funds to pay for personal luxuries, such as a Tesla and a luxury apartment. The complaint alleges violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The SEC is seeking a permanent injunction, disgorgement with interest, civil penalties, and an officer and director bar against Brackett.
Classified corporate-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →
Parties
Securities and Exchange CommissionMichael Brackett
Keywords
brackettmichael brackettsecurities exchangeexchange commissionmichaelsecuritiescentricityexchangesecsec'srevenueartificial intelligenceintelligence start-upcentricity's customersalleges brackett
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 3
- $2.80M $2.8 million $1M–$10M
- $250K $250,000 $100K–$1M
- $60K $60,000 $10K–$100K
Entities 9
- person alex vasilescu
- company centricity, inc.
- person civil penalties
- person michael brackett
- person permanent injunction
- person personal expenses
- agency Securities and Exchange Commission
- person tejal shah
- agency U.S. Attorney's Office For The Southern District Of New York
Triples 16
- Securities And Exchange Commission filed charges Michael Brackett
- Michael Brackett is founder of Centricity, Inc.
- Michael Brackett is CEO of Centricity, Inc.
- Brackett raised $2.8 million from seven investors
- Brackett made misrepresentations about Centricity's customers and revenue
- Brackett misappropriated more than $250,000 from Centricity
- Brackett used funds for personal expenses
- SEC seeks permanent injunction
- SEC seeks disgorgement with prejudgment interest
- SEC seeks civil penalties
- SEC seeks officer and director bar against Brackett
- Kevin Osowski, Kim Han, Michael DiTrapani, and Judith Weinstock are conducting investigation
- Tejal Shah supervises investigation
- Todd Brody, Mr. Osowski, and Ms. Han handle litigation
- Alex Vasilescu supervises litigation
- U.S. Attorney's Office For The Southern District Of New York assisted SEC
PDF (from attached: complaint)
Text layers
Extracted body text (2,368c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25980 / April 19, 2024 Securities and Exchange Commission v. Michael Brackett, No. 24-cv-2965 (S.D.N.Y. filed April 19, 2024) SEC Charges Founder of Artificial Intelligence Start-Up with Defrauding Investors The Securities and Exchange Commission filed charges today against Michael Brackett ("Brackett"), the founder and CEO of purported artificial intelligence start-up Centricity, Inc., for allegedly engaging in a multimillion-dollar offering fraud. According to the SEC's complaint, from 2019 through 2021, Brackett raised $2.8 million from seven investors by making fraudulent misrepresentations about Centricity's customers and revenue as well as Brackett's own educational and employment background. The complaint alleges that Brackett repeatedly told prospective investors that Centricity had contracts with several large national companies and that Centricity's revenue was several million dollars while soliciting their investments. In fact, as alleged in the complaint, there is no evidence that Centricity or Brackett had any contact with most of the companies Brackett asserted were Centricity's customers, let alone contracts with them. The complaint also alleges that Centricity had no revenue in 2020 and less than $60,000 in revenue in 2021. The complaint further alleges that Brackett misappropriated more than $250,000 from Centricity to directly fund his personal expenses, including a luxury apartment, a Tesla, gym memberships, and personal debt. The SEC's complaint, filed in U.S. District Court for the Southern District of New York, charges Brackett with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, disgorgement with prejudgment interest, civil penalties and an officer and director bar against Brackett. The SEC's ongoing investigation is being conducted by Kevin Osowski, Kim Han, Michael DiTrapani, and Judith Weinstock of the New York Regional Office and supervised by Tejal Shah. The SEC's litigation is being handled by Todd Brody, Mr. Osowski, and Ms. Han, and supervised by Alex Vasilescu. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York. SEC ComplaintOCR text (2,368c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25980 / April 19, 2024 Securities and Exchange Commission v. Michael Brackett, No. 24-cv-2965 (S.D.N.Y. filed April 19, 2024) SEC Charges Founder of Artificial Intelligence Start-Up with Defrauding Investors The Securities and Exchange Commission filed charges today against Michael Brackett ("Brackett"), the founder and CEO of purported artificial intelligence start-up Centricity, Inc., for allegedly engaging in a multimillion-dollar offering fraud. According to the SEC's complaint, from 2019 through 2021, Brackett raised $2.8 million from seven investors by making fraudulent misrepresentations about Centricity's customers and revenue as well as Brackett's own educational and employment background. The complaint alleges that Brackett repeatedly told prospective investors that Centricity had contracts with several large national companies and that Centricity's revenue was several million dollars while soliciting their investments. In fact, as alleged in the complaint, there is no evidence that Centricity or Brackett had any contact with most of the companies Brackett asserted were Centricity's customers, let alone contracts with them. The complaint also alleges that Centricity had no revenue in 2020 and less than $60,000 in revenue in 2021. The complaint further alleges that Brackett misappropriated more than $250,000 from Centricity to directly fund his personal expenses, including a luxury apartment, a Tesla, gym memberships, and personal debt. The SEC's complaint, filed in U.S. District Court for the Southern District of New York, charges Brackett with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, disgorgement with prejudgment interest, civil penalties and an officer and director bar against Brackett. The SEC's ongoing investigation is being conducted by Kevin Osowski, Kim Han, Michael DiTrapani, and Judith Weinstock of the New York Regional Office and supervised by Tejal Shah. The SEC's litigation is being handled by Todd Brody, Mr. Osowski, and Ms. Han, and supervised by Alex Vasilescu. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York. SEC Complaint