Texas-based cybersecurity company Intrusion was charged with fraud by the Securities and Exchange Commission (SEC) regarding alleged materially false and misleading statements made by its former chief executive.
The company consented to the entry of a final judgement in reaching settlement, the SEC announced in a litigation release Tuesday. The settlement, which is pending court approval, calls for permanent injunctions against Intrusion.
The details: From May 2020 through May 2021, Intrusion made materially false and misleading statements in press releases, earnings calls, interviews, and other public statements, the SEC alleged in its complaint, filed in U.S. District Court for the Eastern District of Texas.
The agency alleged Intrusion falsely represented most or nearly all beta-testing participants of its cybersecurity product had converted to paying customers, when less than half became paying customers.
In addition, Intrusion allegedly misled investors about customer relationships by omitting material information regarding several contracts.
Intrusion’s former CEO, who was unnamed in the complaint, made false and misleading statements regarding his background and experience, marketing success, and contract terms, the agency alleged. In July 2021, Intrusion’s board of directors terminated him.
The former CEO appears to be Jack Blount, according to a July 2021 press release announcing his departure. At the time, Intrusion noted Blount left “effective immediately and no longer has any affiliation” with the company.
Intrusion and Blount did not respond to requests for comment. The company agreed to settle without admitting or denying the SEC’s findings.