Defendant Kirchner stole over $28 million from investors and used the money to support his extravagant lifestyle.
Scam on Former CEO ofSlync
Slync, Inc., a privately held software company based in Texas, had its co-founder and former CEO, Christopher S. Kirchner, charged by the Securities and Exchange Commission with fraud for offering and selling over $67 million in securities to multiple investors, of which he misappropriated $28 million.
The SEC claims that between January 2020 and January 2022, Kirchner lied to investors about the health of Slync’s finances, including the company’s revenue, the number of contracts with current and potential customers, and how the money raised would be spent. According to reports, Kirchner misappropriated more than $28 million in investor funds raised by Slync between March 2020 and August 2022.
This includes the transfer of tens of millions of dollars from Slync corporate bank accounts to Kirchner’s personal bank accounts and the payment of Kirchner’s personal expenses using one of Slync’s bank accounts. The complaint states that Kirchner failed to make timely payroll distributions to Slync employees while using company funds for his own personal investment entity, KFIM LLC, for leisure costs and a $16 million private jet.
“We allege that Kirchner lied about Slync’s business to secure tens of millions of dollars from investors, a massive portion of which he stole from the company to live extravagantly while not paying Slync’s employees,” said Sheldon L. Pollock the Securities and Exchange Commission’s New York Regional Office Associate Director. All of the Enforcement Division’s efforts are still focused on finding and stopping this type of egregious fraud and prosecuting those responsible for its investors into purchasing securities,” the department says.
The complaint against Kirchner was filed in the United States District Court for the Northern District of Texas and alleges that he violated the antifraud provisions of the federal securities laws. The plaintiffs are asking for a permanent injunction against him as well as disgorgement plus interest from the date of the complaint’s filing, as well as civil penalties and a ban on him from serving as an officer or director.
As a relief defendant, the SEC is also suing KFIM for disgorgement plus interest from the date of judgment. The United States Attorney’s Office for the Northern District of Texas also stated today that it would be pursuing criminal charges against Kirchner in connection with this matter.
Ms Dunning, Ms Knoop, Mr Feretic, Mr Rawlings from the New York Regional Office and Mr Kleinmann from the Fort Worth Regional Office, under the supervision of Mr Pollock, performed the SEC investigation. Jessica T. Quinn and Ms Dunning of the New York Regional Office will be in charge of the case. The SEC values the cooperation it has received from the FBI’s Dallas Field Office.