The founder and former Chief Executive officer of digital advertising technology company Kubient has pleaded guilty to reporting fraudulent financial statements at the time of the company's initial public offering.
"Paul Roberts, the founder and former CEO of Kubient, inflated his company's revenue and lied about the performance of one of its signature products, an AI-powered tool that was supposed to detect ad fraud in the digital advertising industry," U.S. Attorney Damian Williams said.
Roberts had fake documents created to mislead the independent accountants used to audit Kubient's financial statements.
Kubient, Inc. was founded in 2017. Prosecutors say he carried out a fraud scheme from Oct. 2018 through at least March 2021. The $1.3 million in fraudulent revenue was more than 94% of the company's reported revenue.
Roberts had employees create "sample" reports claiming he needed "samples" to demonstrate the kind of reporting the company was capable of providing. He then used the bogus numbers to submit to the audit firm and included them in SEC filings ahead of Kubient's initial and secondary public offerings.
Kubient raised more than $12.5 million in its IPO in or about August 2020, resulting in its shares being publicly traded on the Nasdaq Stock Exchange, and more than $20 million in its secondary public offering in or about December 2020.
Roberts, 48, pleaded guilty in New York on Monday and will be sentenced on Dec. 18, 2024. He faces up to 20 years in prison on one count of securities fraud.
Kubient delisted its stock from the Nasdaq on Nov. 7, 2023, after its stock plummeted to below $1 a share.
