July 19, 2024

SoftBank Sues Former IRL CEO for Alleged Misleading of Investors

1 min read

FILE PHOTO: Alex Mashinsky, founder and former CEO of bankrupt cryptocurrency lender Celsius Network, exits the Manhattan federal court in New York City, U.S., July 25, 2023. REUTERS/Brendan McDermid/File Photo

In a surprising turn of events, SoftBank has filed a lawsuit against former IRL CEO Abraham Shafi and his family members. The Japanese conglomerate claims that they were misled about the messaging app’s growth, leading them to invest a whopping $150 million in the company during the height of the pandemic-fueled consumer internet boom.

According to SoftBank, Shafi and his relatives allegedly defrauded investors by providing false information about the app’s user base. It turns out that the millions of users they boasted about were actually bots. To make matters worse, the defendants went as far as deleting data and communications related to the fraud once U.S. securities regulators started investigating the company.

The investigation was triggered by a report from The Information, which raised doubts about the authenticity of the user figures. As a result, the company’s board of directors initiated an external investigation, which ultimately revealed that a staggering 95% of the app’s users were fake.

This shocking revelation led to the decision to shut down the company. It’s a disappointing end for what was once a promising messaging app. SoftBank’s lawsuit seeks to hold Shafi and his family members accountable for their alleged deception and recover the funds invested in the company.

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