U.S. securities regulators fined a space transportation startup and a special-purpose acquisition tool to mislead investors in such strikes.
The US Securities and Exchange Commission accused Momentus and its former chief executive Mikhail Kokorich (Mikhail Kokorich) of misleading investors regarding the company’s technology and the national security risks associated with its Russian founder.
Spac Stable Road Acquisition, which agreed to list Momentus last year, and its sponsor SRC-NI Holdings and its CEO Brian Kabot have also been sued.
The US Securities and Exchange Commission stated that all parties except Kokorich settled the civil charges and agreed to pay more than $8 million in fines. The regulator has personally sued Kokorich in the U.S. District Court for the District of Columbia, accusing him of fraud.
Anita Bandy, deputy director of the U.S. Securities and Exchange Commission’s Enforcement Division, said: “The former CEO of Momentus was accused of fraud by misrepresenting the feasibility of the company’s technology and its status as a national security threat.
Wide-ranging allegations may herald a broader crackdown spaceIn the past year, more than 100 billion U.S. dollars have been raised to help companies enter the public market without traditional listing procedures.
SEC Chairman Gary Gensler said in a statement: “This case illustrates the risks inherent in the Spac transaction, as those who make substantial profits from the Spac merger may conduct insufficient due diligence and mislead investors.”
Dynamic and stable road Announce In October’s proposed $1.2 billion merger, the two parties announced that they would create the first publicly traded “space infrastructure company.”
Later, Momentus stated in the document that it received a subpoena from the US Securities and Exchange Commission in January requesting documents related to the merger. Last month, the company stated that it resolved a separate review of Kokorich’s previously held ownership interest by the Committee on Foreign Investment in the United States.
Financial Times Reported before Regarding the SEC’s investigation of Momentus.
The US Securities and Exchange Commission accused Kokorich and Momentus of telling investors that they had “successfully tested” the company’s space technology, when in fact the only test “failed to achieve its main mission objectives or prove the commercial viability of the technology.”
The agency also accused both parties of misrepresenting the risks of national security issues to the company’s business, and Stable Road repeated misleading statements in public documents and “failed to perform its due diligence obligations on investors.”
SEC officials emphasized the risk of Spacs failing to conduct adequate due diligence on its objectives, especially when the sponsor does not have time to conclude the transaction within the two-year period.
“One party’s lie does not exempt the other party from the responsibility of due diligence,” an official said.
The transaction between Momentus and Stable Road, where modified Just last month, despite the charges, it can still continue. The two companies have agreed to provide investors in private equity investments (known as Pipes) with termination rights, allowing them to redeem their investments if they wish.
At the same time, Spac investors will have the opportunity to understand what Pipe investors choose to do before voting on the transaction, and the promoter has agreed to confiscate 250,000 shares of the founder’s stock.
Momentus stated: “Momentus and the Securities and Exchange Commission have reached an agreement on a settlement. We are happy to conclude this chapter and move on.”
Kokoric declined to comment. Stable Road and Kabot did not immediately respond to requests for comment.