In an amended complaint filed in SEC v. Adam Rogas, et. al, a fraud case alleging that NS8 defrauded investors by falsely claiming millions of dollars in revenue, the SEC added charges against Adam Rogas, NS8’s former CEO, for allegedly impeding and retaliating against an employee who blew the whistle on Rogas’ fraudulent conduct.
The facts alleged in the complaint are a striking illustration of how a company should not respond to an internal whistleblower complaint. Rogas, who made more than $17 million from his fraud scheme, suspended the whistleblower’s access to NS8 computer systems, barred the whistleblower from NS8’s office, accessed the whistleblower’s personal email account to obtain the whistleblower’s communications with his attorney about an SEC whistleblower complaint, and swiftly terminated the whistleblower’s employment. Holding Rogas accountable for his efforts to impede a whistleblower’s communication to the SEC and his retaliation against a whistleblower is important to ensure the continued success of the SEC whistleblower program.
Rogas’ Fraud Scheme
According to the SEC’s complaint, Rogas was the founder and CEO of NS8, a private technology company. He defrauded NS8 investors in various securities offerings by falsifying NS8’s bank statements to give the appearance that NS8 was generating millions of dollars in customer revenue with tens of millions of dollars of assets on hand.
He used the false financial information in investor presentations and...
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