SEC v. Christopher S. Kirchner; and KFIM LLC, No. LR-25639, Northern District of Texas (Feb. 14, 2023) — Press Release

SEC Charges Former CEO of Slync in $67 Million Offering Fraud Defendant Kirchner Misappropriated More Than $28 Million of Investor Proceeds to Fund His Lavish Lifestyle Litigation Release No. 25639 / February 14, 2023 Securities and Exchange Commission v. Christopher S. Kirchner, et al., No. 4:23-cv-00147 (N.D. Tex. filed Feb. 14, 2023) The Securities and Exchange Commission today charged Christopher S. Kirchner, the co-founder and former CEO of Slync, Inc., a privately-held Texas-based software company, with fraudulently offering and selling more than $67 million of securities to multiple investors, more than $28 million of which he misappropriated for personal benefit. The SEC's complaint alleges that, between approximately January 2020 and January 2022, Kirchner misrepresented the financial condition of Slync to investors, including concerning the amount of revenue received from customers and the nature and volume of contracts with existing and potential customers, as well as the planned use of fundraising proceeds. In addition, between March 2020 and his termination from Slync in August 2022, Kirchner allegedly misappropriated more than $28 million of the funds Slync raised from investors, including by transferring tens of millions of dollars from Slync corporate bank accounts to his personal bank accounts and by paying for his personal expenses directly out of one of Slync's bank accounts. As alleged in the complaint, Kirchner used the money to, among other things, fund his personal investment entity, KFIM LLC, pay entertainment expenses, and purchase a $16 million personal private jet, all while failing to make timely payroll distributions to Slync employees on several occasions. The complaint, filed in the United States District Court for the Northern District of Texas, alleges that Kirchner violated Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctive relief, disgorgement and prejudgment interest, civil penalties, an officer and director bar against Kirchner, and names KFIM as a relief defendant. The SEC also seeks disgorgement with prejudgment interest from KFIM. In a parallel action, the U.S. Attorney's Office for the Northern District of Texas today announced the filing of related criminal charges against Kirchner. The SEC's investigation was conducted by Mary Kay Dunning, Lisa Knoop, Thomas Feretic, and Steven G. Rawlings of the New York Regional Office and Derek Kleinmann of the Fort Worth Regional Office, and it was supervised by Sheldon L. Pollock. The litigation will be led by Jessica T. Quinn and Ms. Dunning of the New York Regional Office. The SEC appreciates the assistance of the Federal Bureau of Investigation - Dallas Field Office. SEC Complaint

SEC Charges Former CEO of Slync in $67 Million Offering Fraud Defendant Kirchner Misappropriated More Than $28 Million of Investor Proceeds to Fund His Lavish Lifestyle Litigation Release No. 25639 / February 14, 2023 Securities and Exchange Commission v. Christopher S. Kirchner, et al., No. 4:23-cv-00147 (N.D. Tex. filed Feb. 14, 2023) The Securities and Exchange Commission today charged Christopher S. Kirchner, the co-founder and former CEO of Slync, Inc., a privately-held Texas-based software company, with fraudulently offering and selling more than $67 million of securities to multiple investors, more than $28 million of which he misappropriated for personal benefit. The SEC's complaint alleges that, between approximately January 2020 and January 2022, Kirchner misrepresented the financial condition of Slync to investors, including concerning the amount of revenue received from customers and the nature and volume of contracts with existing and potential customers, as well as the planned use of fundraising proceeds. In addition, between March 2020 and his termination from Slync in August 2022, Kirchner allegedly misappropriated more than $28 million of the funds Slync raised from investors, including by transferring tens of millions of dollars from Slync corporate bank accounts to his personal bank accounts and by paying for his personal expenses directly out of one of Slync's bank accounts. As alleged in the complaint, Kirchner used the money to, among other things, fund his personal investment entity, KFIM LLC, pay entertainment expenses, and purchase a $16 million personal private jet, all while failing to make timely payroll distributions to Slync employees on several occasions. The complaint, filed in the United States District Court for the Northern District of Texas, alleges that Kirchner violated Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctive relief, disgorgement and prejudgment interest, civil penalties, an officer and director bar against Kirchner, and names KFIM as a relief defendant. The SEC also seeks disgorgement with prejudgment interest from KFIM. In a parallel action, the U.S. Attorney's Office for the Northern District of Texas today announced the filing of related criminal charges against Kirchner. The SEC's investigation was conducted by Mary Kay Dunning, Lisa Knoop, Thomas Feretic, and Steven G. Rawlings of the New York Regional Office and Derek Kleinmann of the Fort Worth Regional Office, and it was supervised by Sheldon L. Pollock. The litigation will be led by Jessica T. Quinn and Ms. Dunning of the New York Regional Office. The SEC appreciates the assistance of the Federal Bureau of Investigation - Dallas Field Office. SEC Complaint