Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—D. Mass.: Company improperly recognized $14M in revenue from sham/forged consulting agreements, (Aug 12, 2026)

By Jay Fishman, J.D.

One executive officer settled with the SEC for $50,000.

The SEC charged a public company and its executive officers with fraud under various federal Securities and Exchange Act provisions, for overstating revenue by approximately 345 percent, which came from creating sham and forged consulting agreements. The SEC’s complaint before the Massachusetts District Court requested a permanent injunction, disgorgement, prejudgment interest, and civil monetary penalties. One of the executive officers agreed to pay a $50,000 civil monetary penalty subject to court approval (SEC v. Fanning, No. 1:26-cv-13665 (D. Mass. Aug. 10, 2026)).

Sham and forged consulting agreements. The Commission’s complaint alleged that from October 2021 through January 2024, the company and its current and former executive officers schemed to overstate the company’s revenue by approximately 345 percent while raising more than $25 million from investors. They accomplished the fraud—improperly recognizing nearly $14 million in revenue on SEC form filings and securities offering materials—by entering into consulting agreements with startups seeking public investment under SEC Regulation Crowdfunding (Reg CF). The SEC more specifically alleged that the consulting agreements were shams that the executive officers forged.

The case is No. 1:26-cv-13665.

Attorneys: Michael C. Moran for the SEC.

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