An AI startup and its former CEO have settled allegations that they misled investors when raising capital through a series of crowdfunding offerings by overstating the company’s financial prospects.
The U.S. Securities and Exchange Commission (SEC) filed settled charges against Miami-based GenesisAI Corp. and its founder and former CEO, Archil Cheishvili, alleging that they made various misrepresentations to investors about the company’s projected revenue, its then-current valuation and its customer demand.
Between December 2019 and 2024, the company raised more than US$5.3 million in a series of crowdfunding campaigns while misrepresenting its financials and potential clients, the regulator alleged.
“Defendants’ negligently made material misrepresentations to prospective investors about GenesisAI’s anticipated revenue growth and its claimed substantially increasing year-to-year valuations belied its functionality and the lack of actual customers,” the SEC said in its complaint.
Ultimately, in January 2025, the company announced it was stopping its product development efforts and that Cheishvili was stepping down from his role at the company.
Without admitting the SEC’s allegations, the defendants consented to the entry of final judgments that order Cheishvili to pay US$59,184 in disgorgement and a US$50,000 penalty, and impose a permanent injunction. The settlement is subject to court approval.