NASDAQ in New York, United States
Caproasia.com | The leading source of data, research, information & resource for financial professionals, institutional investors, professional investors and private investors (UHNWs, & HNWs). Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets?

This site is for accredited investors, professional investors, investment managers and financial professionals only. You should have assets around $3 million to $300 million or managing $20 million to $3 billion.





United States SEC Reaches $38.8 Million Fraud Settlement of SPAC Music Streaming Company

29th October 2021 | Hong Kong

The United States Securities and Exchange Commission (SEC) has reached a $38.8 million fraud settlement of SPAC music streaming company Akazoo.  Based in Greece, Akazoo had allegedly defrauded investors of $55 million in connection with a 2019 special purpose acquisition company (SPAC) business combination.  Akazoo’s assets were previously frozen as the result of an emergency action filed by United States SEC in September 2020.  Akazoo represented to investors that it was a rapidly growing music streaming company focused on emerging markets with more than 38.2 million registered users, 4.6 million paying subscribers, and over $120 million in annual revenue. In reality, the complaint alleged that the company had no paying users and, at most, negligible revenue.  SPAC (Special Purpose Acquisition Company)

“ United States SEC Reaches $38.8 Million Fraud Settlement of SPAC Music Streaming Company “

 



2021 Data Release
2020 List of Private Banks in Hong Kong
2020 List of Private Banks in Singapore
2020 Top 10 Largest Family Office
2020 Top 10 Largest Multi-Family Offices
2020 Report: Hong Kong Private Banks & Asset Mgmt - $4.49 Trillion
2020 Report: Singapore Asset Mgmt - $3.48 Trillion AUM


SPAC (Special Purpose Acquisition Company) is also popularly referred to as a blank cheque company, that allows the listed company without any existing businesses to raise capital through an IPO (initial public offering), and thereafter use the capital to invest into companies.

 

United States SEC on SPAC Akazoo:

NASDAQ
NASDAQ in New York, United States

According to the United States Securities and Exchange Commission ‘complaint, Akazoo represented to investors that it was a rapidly growing music streaming company focused on emerging markets with more than 38.2 million registered users, 4.6 million paying subscribers, and over $120 million in annual revenue. In actuality, the complaint alleged that the company had no paying users and, at most, negligible revenue. Akazoo allegedly leveraged these misrepresentations to enter into a SPAC business combination in 2019, in which the company received nearly $55 million from the SPAC and other investors. According to the complaint, after the business combination, Akazoo became listed on Nasdaq and proceeded to defraud retail investors by misrepresenting, among other things, that it had earned tens of millions of dollars in revenue during 2019 and increased its paying subscriber base by 28% year-over-year. In reality, the company allegedly continued to have limited operations, no subscribers, and marginal revenue, all while depleting more than $20 million of investor funds.

The SEC filed its emergency action to, among other things, preserve the company’s remaining $31.5 million in cash and other assets. In October 2020, the court signed and entered an agreed stipulation whereby Akazoo agreed to an asset freeze. In April 2021, without admitting or denying the allegations, Akazoo agreed to a bifurcated judgment that permanently enjoined the company from violating, among other things, the antifraud and reporting provisions of the federal securities laws. The settlement announced today fully resolves the litigation by ordering Akazoo to pay $38.8 million in disgorgement, an amount that will be deemed satisfied by the company’s payment of $35 million to the investors victims and settlements in connection with several private class action lawsuits.

 

David Peavler, Regional Director of the SEC’s Fort Worth Regional Office:

“One goal in filing this emergency action was to preserve assets for the benefit of injured investors, and this resolution accomplishes that goal. The SEC is intently focused on SPAC merger transactions, and we will continue to hold wrongdoers in this space accountable.”

 

The SEC’s investigation, which is ongoing, is being conducted by Samantha S. Martin, Melvin Warren, and Carol Stumbaugh of the SEC’s Fort Worth Regional Office, under the supervision of Scott F. Mascianica and Eric Werner. Matthew Gulde led the litigation against Akazoo under B. David Fraser’s supervision.

 

Related:

 

 



Caproasia.com | The leading financial website for financial professionals, professional investors and HNW investors. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Quicklinks: Caproasia Access | TFC | Caproasia | Jobs

Join 14,000+ leading financial professionals and professional investors in Asia. Stay ahead of your peers & competition.
For press release, email to press@caproasia.com
For editorial, media kit, listing on TFC, events, seminars or research & data services, email to mail@caproasia.com


Previous articleDeVos Family Office RDV Corp Invested $100 Million into Elizabeth Holmes Theranos
Next articleAsian Infrastructure Investment Bank to Fully Align with Goals of Paris Agreement by 2023
Caproasia.com covering capital markets, investments and private wealth in Asia. Our users manage, advise & invest $25 trillion assets in Asia