SEC settles charges against Rimar Capital for false AI trading claims
The SEC settled fraud charges against Rimar Capital and its executives for raising nearly $4 million from investors using false claims about an AI-driven trading platform that did not exist. The firm also misrepresented assets under management and client returns, and the CEO misappropriated funds for personal expenses.
What happened
Itai Liptz, owner and CEO of Rimar Capital LLC and Rimar Capital USA, with the help of board member Clifford Boro, raised nearly $4 million from 45 investors by making false and misleading statements about an AI-driven trading platform. The SEC found that the firm had no trading application at the time of fundraising and has never had a trading platform for stock or crypto assets.
Liptz and Boro made repeated claims about the AI platform through pitch decks, online posts in a members-only investment group, and emails to prospective investors. They also falsely claimed assets under management of between $16 million and $20 million when the firm actually had less than $2 million, and claimed client account performance of a 46% compounded annual growth rate since 2015.
Reported impact
45 investors were misled and raised approximately $3.73 million in capital based on the fraudulent claims. Liptz also misappropriated company funds for personal expenses that investors were told would be used for marketing and development of a hedge fund app.
Index analysis
The scheme relied on AI 'buzzwords' to describe non-existent capabilities, with the SEC noting this as part of broader 'AI washing' practices aimed at misleading investors about technological capabilities in an increasingly popular AI-focused investment space.
Governance controls
Without admitting or denying the SEC's findings, Rimar USA, Rimar LLC, Liptz, and Boro consented to an order finding antifraud violations and agreed to cease and desist from violating the charged provisions. Liptz agreed to pay disgorgement and prejudgment interest totaling $213,600, a $250,000 civil penalty, and accepted a five-year ban from the industry. The entities collectively paid $310,000 in total civil penalties and Rimar was censured.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.