The Securities and Exchange Commission (SEC) has filed charges against Michael Brackett, founder and CEO of purported artificial intelligence start-up Centricity, Inc., for alleged involvement in a multi-million dollar IPO scam.
According to the SEC complaint, from 2019 to 2021, Brackett raised $2.8 million from seven investors by making fraudulent misrepresentations about Centricity’s clients and revenue, as well as Brackett’s own educational and employment background .
The complaint alleges that Brackett repeatedly told prospective investors that Centricity had contracts with several large national companies and that Centricity’s revenue was several million dollars while soliciting their investments. In fact, the complaint alleges, there is no evidence that Centricity or Brackett had any contact with, let alone contracts with, most of the companies Brackett claimed were Centricity’s customers.
The complaint also alleges that Centricity had no revenue in 2020 and less than $60,000 in revenue in 2021. The complaint also alleges that Brackett embezzled more than $250,000 from Centricity to directly fund his personal expenses, including a luxury apartment , a Tesla, gym memberships. and personal debt.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, accuses Brackett of violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder.
The SEC is seeking a permanent injunction, disbarment with prejudice, civil penalties and an officer and director against Brackett.