In June, cyber-fraud-prevention startup NS8 Inc. trumpeted how a $123 million fundraising round would fuel “hyper-growth.” Three months later, the Las Vegas-based company has fired most of its employees and federal prosecutors have charged its former chief executive with fraud.
Law-enforcement agents arrested
on Thursday in Nevada in connection with alleged securities fraud, with Justice Department officials saying he created tens of millions of dollars in fictitious revenue and assets on financial statements provided to investors. Mr. Rogas also pocketed $17.5 million of their cash when NS8 bought some of his shares in the company, according to prosecutors.
“As alleged, Adam Rogas was the proverbial fox guarding the henhouse,”
acting U.S. attorney for the Southern District of New York, said in a statement.
Prosecutors charged Mr. Rogas with securities fraud, wire fraud and fraud in the offer and sale of securities.
The Securities and Exchange Commission in a separate complaint alleged Mr. Rogas continued cooking the books even after the agency initially subpoenaed him last November.