The US Securities and Exchange Commission has charged Abraham Shafi, the founder and former CEO of Get Together Inc., with defrauding investors by making false statements about the company’s growth and concealing personal expenses paid with company funds. Shafi raised approximately $170 million by claiming that his social media platform, known as IRL, had attracted 12 million users organically. In reality, the company spent millions on advertising to incentivize app downloads, misleading investors about its financial practices.
According to the SEC’s complaint, Shafi significantly understated marketing expenses in offering documents and funneled payments for advertising through third parties to hide the true costs. This manipulation created a false narrative about the company’s success, which he used to attract investment. The SEC alleges that Shafi’s actions not only violated federal securities laws but also demonstrated a blatant disregard for investor trust.
Additionally, the complaint reveals that Shafi and his fiancée, Barbara Woortmann, charged hundreds of thousands of dollars in personal expenses to IRL’s business credit cards. These expenditures included purchases for clothing, home furnishings, and travel, which were ultimately covered by investor money. This misuse of funds raised further ethical concerns regarding the company’s management.
The SEC is seeking various remedies, including civil penalties, disgorgement of ill-gotten gains, and a bar against Shafi serving as an officer or director in the future. Woortmann is also named as a relief defendant, facing similar penalties for her role in the misuse of company funds. The case highlights the importance of vigilance among investors in the technology sector, particularly as pre-IPO opportunities continue to attract significant interest.
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