SEC Charges Rimar Capital Entities and Owner Itai Liptz for Defrauding Investors by Making False and Misleading Statements About Use of Artificial Intelligence
summary
Rimar Capital USA, Itai Liptz, and Clifford Boro settled SEC charges for 'AI washing' and misrepresenting assets to raise nearly $4 million from 45 investors.
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The SEC charged Rimar Capital USA, Rimar LLC, Itai Liptz, and Clifford Boro with antifraud violations for misrepresenting AI capabilities and investment returns. The group raised nearly $4 million from 45 investors while Liptz improperly used company funds for personal expenses. Total civil penalties amount to $310,000, with Liptz also paying $213,611 in disgorgement and interest.
narrative
The SEC charged Rimar Capital USA, Rimar LLC, CEO Itai Liptz, and board member Clifford Boro for 'AI washing' and making material misrepresentations regarding automated trading capabilities. The parties raised nearly $4 million from 45 investors by falsely claiming to use an AI-driven platform and misstating assets under management and investment returns. Additionally, Liptz improperly used company funds for personal expenses. To settle the charges, the parties agreed to $310,000 in total civil penalties, including $250,000 from Liptz and $60,000 from Boro. Liptz also must pay $213,611 in disgorgement and interest and faces an investment industry bar. Rimar LLC also consented to a censure to resolve the antifraud violations.
Classified investment-adviser-fraud(confidence 97%). EDGAR detection: forms ADV/ADV-E/ADV-W/Form D· recall 33% / precision 13%. detection rule →
Parties
andrew deanliptz lured investors and clients with fabrications about ai technologynearly $4 million from 45 investors for the development of rimar llcroberto grassothe sec’s charges and pay $310,000 in total civil penaltiesthe sec’s investigationthe sec’s office of investor education and advocacythe securities and exchange commission
Keywords
rimarliptzllcsecaboutrimar capitalmisleading statementsitai liptzmaking falsefalse misleadingstatements aboutartificial intelligenceusaborocapital
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 5
- $4.00M $4 million $1M–$10M
- $310K $310,000 $100K–$1M
- $250K $250,000 $100K–$1M
- $214K $213,611 $100K–$1M
- $60K $60,000 $10K–$100K
Entities 8
- person andrew dean
- company liptz lured investors and clients with fabrications about ai technology
- company nearly $4 million from 45 investors for the development of rimar llc
- person roberto grasso
- agency the sec’s charges and pay $310,000 in total civil penalties
- agency the sec’s investigation
- agency the sec’s office of investor education and advocacy
- agency the securities and exchange commission
Triples 10
- The Securities and Exchange Commission Announced Charges Rimar Capital USA, Inc. (Rimar USA), Rimar Capital, LLC (Rimar LLC), Itai Liptz, and Clifford Boro
- The Parties Agreed to Settle The SEC’s Charges and Pay $310,000 in Total Civil Penalties
- Liptz Raised Funds Nearly $4 Million from 45 Investors for the Development of Rimar LLC
- The Order Found Misrepresentations Rimar LLC’s Assets Under Management and Its Investment Returns
- Rimar LLC and Liptz Obtained Advisory Clients Using the Misleading Statements
- Liptz Used Company Funds For Personal Expenses
- Andrew Dean Stated Liptz Lured Investors and Clients with Fabrications About AI Technology
- The SEC’s Office of Investor Education and Advocacy Issued an Investor Alert About AI and Investment Fraud
- The SEC’s Investigation Was Conducted By Payam Danialypour Under the Supervision of Brent Wilner and Mr. Dean
- Roberto Grasso Assisted With The Investigation
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Extracted body text (2,432c)
The Securities and Exchange Commission today announced charges against Rimar Capital USA, Inc. (Rimar USA), Rimar Capital, LLC (Rimar LLC), Itai Liptz, and Clifford Boro for making false and misleading statements about Rimar LLC’s purported use of artificial intelligence, or AI, to perform automated trading for client accounts and numerous other material misrepresentations. The parties agreed to settle the SEC’s charges and pay $310,000 in total civil penalties. According to the SEC order, Liptz, owner and CEO of Rimar LLC and Rimar USA, with the help of Boro, a Rimar USA board member, raised nearly $4 million from 45 investors for the development of Rimar LLC, an investment adviser that was falsely described as having an AI-driven platform for trading securities. The order found that the Rimar entities, Liptz, and Boro also made misrepresentations about Rimar LLC’s assets under management and its investment returns. In addition, the order found that Rimar LLC and Liptz obtained advisory clients using the misleading statements and that Liptz improperly used company funds for personal expenses. “Through entities he controlled, Liptz lured investors and clients with multiple fabrications, including with buzzwords about the latest AI technology,” said Andrew Dean, Co-Chief of the SEC’s Asset Management Unit. “As AI becomes more popular in the investing space, we will continue to be vigilant and pursue those who lie about their firms’ technological capabilities and engage in ‘AI washing’.” Without admitting or denying the SEC’s findings, Rimar USA, Rimar LLC, Liptz, and Boro consented to the entry of an order finding antifraud violations and to cease and desist from violating the charged provisions. Liptz consented to pay disgorgement and prejudgment interest totaling $213,611, to pay a $250,000 civil penalty, and to be subject to an investment company prohibition and associational bar with the right to reapply in five years. Boro agreed to pay a $60,000 civil penalty. Rimar LLC consented to be censured. The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert about AI and investment fraud. The SEC’s investigation was conducted by Payam Danialypour under the supervision of Brent Wilner, Associate Regional Director of the Los Angeles Regional Office, and Mr. Dean. Roberto Grasso of the Division of Examinations, Office of Risk and Strategy assisted with the investigation.
OCR text (2,432c · html-text · 99% conf)
The Securities and Exchange Commission today announced charges against Rimar Capital USA, Inc. (Rimar USA), Rimar Capital, LLC (Rimar LLC), Itai Liptz, and Clifford Boro for making false and misleading statements about Rimar LLC’s purported use of artificial intelligence, or AI, to perform automated trading for client accounts and numerous other material misrepresentations. The parties agreed to settle the SEC’s charges and pay $310,000 in total civil penalties. According to the SEC order, Liptz, owner and CEO of Rimar LLC and Rimar USA, with the help of Boro, a Rimar USA board member, raised nearly $4 million from 45 investors for the development of Rimar LLC, an investment adviser that was falsely described as having an AI-driven platform for trading securities. The order found that the Rimar entities, Liptz, and Boro also made misrepresentations about Rimar LLC’s assets under management and its investment returns. In addition, the order found that Rimar LLC and Liptz obtained advisory clients using the misleading statements and that Liptz improperly used company funds for personal expenses. “Through entities he controlled, Liptz lured investors and clients with multiple fabrications, including with buzzwords about the latest AI technology,” said Andrew Dean, Co-Chief of the SEC’s Asset Management Unit. “As AI becomes more popular in the investing space, we will continue to be vigilant and pursue those who lie about their firms’ technological capabilities and engage in ‘AI washing’.” Without admitting or denying the SEC’s findings, Rimar USA, Rimar LLC, Liptz, and Boro consented to the entry of an order finding antifraud violations and to cease and desist from violating the charged provisions. Liptz consented to pay disgorgement and prejudgment interest totaling $213,611, to pay a $250,000 civil penalty, and to be subject to an investment company prohibition and associational bar with the right to reapply in five years. Boro agreed to pay a $60,000 civil penalty. Rimar LLC consented to be censured. The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert about AI and investment fraud. The SEC’s investigation was conducted by Payam Danialypour under the supervision of Brent Wilner, Associate Regional Director of the Los Angeles Regional Office, and Mr. Dean. Roberto Grasso of the Division of Examinations, Office of Risk and Strategy assisted with the investigation.