VC Manager Misrepresented Promises from Prospective Investors
A purported venture capital fund manager was barred from the industry for at least 10 years for lying to prospective investors to induce them to invest. Using Facebook and other communications, the defendant told prospective investors that he had already received up to $13 Million in commitments from other investors, when, in fact, he only received some non-binding indications of interest. The SEC also alleges that the defendant lied about the number of underlying investments and his returns.
As the Everly Brothers sang, “Wishing Won’t Make it So.” Just because you hope somebody invests or even if they say they may be interested, you can’t leverage that interest into promises to other investors.