The federal Securities and Exchange Commission has filed suit against the co-founders of Fresno-based Bitwise, claiming they allegedly defrauded investors out of nearly $70 million.
In a 2022 securities offering, Jake Soberal and Irma Olguin, Jr. "made false and misleading statements to investors, including inflating the company’s key
financial metrics," says the lawsuit filed in U.S. District Court for the Eastern District of California. "To substantiate their false claims, Defendants also provided several investors with fabricated documents, including altered bank statements and a falsified audit report."
About 20 investors participated in the companies securities offering, the suit says.
"Defendants represented to investors that Bitwise had significant revenue and maintained healthy cash balances," the suit states. "But the strong financial picture Defendants painted was, in fact, a sham. Soberal and Olguin knew that Bitwise had generated far less revenue than what they told investors. In addition, Soberal and Olguin told investors that Bitwise had substantial cash balances while concealing that the company regularly lacked cash and struggled to pay employees and other operational expenses."
The two men also allegedly misled investors about an outside audit and provided an investor with a falsified document related to the audit, the lawsuit claims.
The suit seeks a return of the " ill-gotten gains" with interest, plus penalties.
The SEC is represented by its attorneys Drew Liming, Monique C. Winkler, Jason Lee, Rahul Kolhatkar and Marc D. Katz.
SEC v. Jake Soberal et al, U.S. District Court for the Eastern District of California, 1:23-cv-01585-BAM