The Securities and Exchange Commission (SEC) has announced charges against Jake Soberal and Irma Olguin, Jr., the former co-CEOs of Bitwise Industries Inc., a Fresno-based private technology services startup. The charges stem from allegations of misleading investors about the company's finances, with Soberal and Olguin accused of engaging in fraudulent activities.

According to the SEC's complaint, Soberal and Olguin raised approximately $70 million from investors in 2022 while making material misrepresentations and falsifying documents concerning Bitwise's cash position and historical financial performance. The complaint alleges that the former CEOs created and provided investors with falsified bank records and a fake audit report, portraying inflated cash balances and higher revenues than actually generated by the company.

The alleged misrepresentations and falsifications presented Bitwise as a healthy and growing business with favorable financial performance. In reality, the company faced continuous cash shortages and was often on the brink of failure due to its inability to generate sufficient funds from operations. The scheme allegedly came to light in May 2023 when Bitwise failed to meet payroll obligations and had to furlough and terminate all its staff members.

Monique C. Winkler, Regional Director of the SEC's San Francisco Regional Office, expressed concerns over the blatant fraud committed by Soberal and Olguin, stating that they resorted to creating fake financial documents to deceive investors and raise money. Notably, the defendants allegedly sent a screenshot to investors, falsely indicating a cash balance of $23.4 million in a company bank account when, in reality, it held only $325,100.

The SEC's complaint, filed in the U.S. District Court for the Eastern District of California, charges Soberal and Olguin with violating the antifraud provisions of federal securities laws. The former CEOs have reached an agreement with the SEC, subject to court approval, that includes permanent and conduct-based injunctions, an officer and director bar, and reserving the issues of disgorgement, prejudgment interest, and a civil penalty for further determination.

In parallel with the SEC's action, the U.S. Attorney's Office for the Eastern District of California announced criminal charges against Soberal and Olguin. The investigation is ongoing, conducted by the SEC's San Francisco Regional Office, and is being supervised by Rahul Kolhatkar and Jason H. Lee. The litigation will be led by Marc D. Katz.

The SEC commends the assistance provided by the U.S. Attorney's Office, the Federal Bureau of Investigation, and the Internal Revenue Service Criminal Investigation in this case. The charges against Soberal and Olguin serve as a reminder for the SEC's commitment to hold individuals accountable for fraudulent activities that harm investors and the integrity of the financial market.

Note: This article is based solely on the information provided. Additional updates or developments may not be included.