Former SFX Entertainment founder Robert Sillerman has agreed to pay a $179,000 fine after the U.S. Securities and Exchange Commission charged the businessman with fraud for illegally diverting company funds to personal accounts while misrepresenting celebrity endorsements and the financial health of his online publishing and entertainment business Function(x) to attract new investors, Billboard reported. Announced June 28, the settlement also permanently bars Sillerman from holding an officer or director role at any public company. According to the SEC's complaint, Function(x) incurred significant losses during the first quarter of 2017 and completed a public securities offering that brought in $4.8 million from investors in order to raise capital and fund operations. The complaint alleges that Sillerman then fraudulently diverted $500,000 of the offering proceeds to repay loans he made to the company where he held the title of CEO. Sillerman was also accused of misleading individuals to invest in Function(x) by falsely claiming two unnamed celebrities had agreed to invest in the company. In order to con investors into believing the celebrities were involved with Function(x), Sillerman allegedly created phony subscription documents with forged signatures from the two celebrities.
