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2mo ago

Former Kubient CEO Sentenced to Prison for Securities Fraud

Paul Roberts, who misled investors and auditors with fraudulent revenue and false claims about an AI tool, will serve one year and one day in federal prison.

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Man in dark pinstripe suit holding open a briefcase, from which papers are flying out and covering his face.

Overview

  • Paul Roberts, former CEO of Kubient, was sentenced to one year and one day in prison, followed by one year of supervised release, for orchestrating an accounting fraud scheme.
  • Roberts inflated Kubient’s revenue by $1.3 million through a fraudulent transaction with another company, which accounted for over 94% of the company’s reported revenue during its 2020 IPO.
  • He directed employees to create fake reports for the company’s AI fraud detection tool, KAI, to mislead auditors and justify the fraudulent revenue.
  • Kubient raised over $32.5 million through its IPO and secondary public offering, based on misrepresented financial health and exaggerated claims about KAI’s capabilities.
  • The SEC has filed a civil action against Roberts, and Kubient, delisted from Nasdaq in 2023, has since filed for Chapter 7 bankruptcy.