The former CEO of cyberfraud prevention company NS8 Inc. pleaded guilty in Manhattan federal court to lying about the company's finances to solicit $123 million in investments, Reuters reported. Adam Rogas was arrested in September 2020 after prosecutors alleged he doctored NS8’s bank statements to inflate revenues by tens of millions of dollars. He pleaded guilty to securities fraud and agreed to forfeit $17.5 million he received from the scheme, prosecutors said. U.S. Attorney Damian Williams said Rogas had been held accountable for being “the proverbial fox guarding the henhouse” by defrauding investors “while claiming to be in the fraud prevention business.” William Sullivan of Pillsbury Winthrop Shaw Pittman, who represents Rogas, said his client “accepted full responsibility for the consequences of his unfortunate and uncharacteristic actions,” which he said “were only intended to afford NS8 sufficient time to sustain itself and to ultimately thrive” for the benefit of customers, employees and investors. NS8 raised $123 million in two offerings of preferred stock to accredited investors in 2019 and 2020 using falsified account statements, prosecutors said. Venture capital firms Lightspeed Venture Partners and AXA Venture Partners were the lead investors in the offerings. After securing the second round of funding, NS8 bought back company stock in a tender offer, including $17.5 million in stock held by Rogas, prosecutors said. The U.S. Securities and Exchange Commission filed a parallel civil lawsuit.
